Are You Looking For Money?

Many businesses owners argue that the banks aren’t lending money and the banks respond by saying the number of requests they receive for business loans has reduced.

Both views contain an element of truth as banks have, undoubtedly, restricted their lending and companies are naturally more cautious in the current climate.

Whatever the reality of the situation small business owners will always need finance to start and grow their businesses, particularly when traditional sources are restricted.

There is little doubt that credit was too freely available and, some would argue, too cheap and that a tightening in the supply of money was needed.

As a result, there is a growing realisation of the need for small businesses to find alternative non-traditional and more accessible sources of finance.

In recent years, sources such as Business Angels, Crowdfunding and Venture Capital have become more popular.

Business Angels are usually individuals of high-net-worth and often entrepreneurs themselves with an interest in investing in small businesses at an early stage.

In addition to their financial investment and track record, they bring a wealth of contacts and experience that can help to access the traditional banks.

Business Angels often invest in companies as a way to help and support other entrepreneurs, as well as hoping to make a financial gain.

Crowdfunding is relatively new and described as peer-to-peer lending. It is carried out on the internet with individuals and organisations providing the funding. The speed with which funding can be raised is seen as one of the benefits of this particular approach.

Venture capital funding usually takes equity in the business with a clear plan to exit at a future date to regain the initial investment. This type of funding is often focussed on high-growth companies with the potential for a high level of return.

One of the characteristics of this type of finance is the need for the business owner to offer some equity to attract the investment.

So, the debate between business owners and banks will continue as funding remains tight but there are alternatives for those wishing to pursue them.

What do you think? Are you looking for money? Get in touchwe would love to hear your views contact Nick on 028 8224 9494 or via Twitter @nick_oec.