Raising Business Finance

Cashflow is the lifeline of business; without it your business is sadly destined to fail. Nearly everything that you do within your business revolves around money so one of your main priorities is making sure that your cashflow can cover all of your business expenses. If your cashflow can’t its time you started looking towards gaining some help with your finances.

Raising business finance, whether you are a start up company or an established businesses is a complex area but it is something that most businesses will have to go through as few businesses can rise finance for what they need from their cashflow alone. Think of it this way, start up businesses with have little cash to pay for aspects such as property, equipment and stock as well as staff wages. You can’t rely on cash flow to cover these aspects as your business hasn’t yet made its first sale and established businesses who do have a steady cash flow won’t have enough to cover a new venture as well as keeping on top of staff wages, stock and bills. Due to this both start up and established businesses turn to alternative ways of raising finance.

If you are in the position of needing to raise finance for your business you need to be certain that you have asked for the right amount of money as it is difficult to go back to a lender or investor a second time to ask for more money. So where exactly can you raise this extra finance from?

There are many avenues that you can approach in order to raise extra finance for your business, such as:

• Business angels or venture capitalists • Family and friends • Overdrafts or short term loans • Hire purchase and leasing • Factoring and invoice discounting

The finance that you will be raising for your business is classed as either being debt or equity finance. There is a significant difference between the two for the fact that debt finance is money that needs to be repaid with added interest whereas equity finance is money that is invested into your business for a share of the profit. Equity finance doesn’t need to be repaid for the fact that you are in a sense selling a share of your business. It may be a good idea to strike a balance between equity and debt to ensure the funding structure suits the business.

When you are seeking finance for your business it is important that you produce a good business plan that clearly states your financial forecast for your business. This is because you have to convince lenders that your business idea is profitable; you have to make them want to lend you money or invest in your company.

If you are currently in the process of finding ways to raise finance for your business then you need to investigate all of the avenues that are open to you and find the one that works best for you. To help you do this ARCH Credit are on hand to guide you through the maze of business finance options open to you. So if you would like to know more about raising finance for your business contact ARCH Credit today by filling in our online form and one of the team will get back to you as soon as possible.