Business Funding

One of the greatest reasons for business failure is the lack of appropriate or adequate funding to support growth and operations. This is especially a great constraint for small businesses all over the world. On the other hand, there remain numerous funding opportunities for businesses that are either underutilised or totally unutilised. We explore different types of business funding for businesses in the United Kingdom.

How you can get funding for your business

There are different types of funding opportunities for businesses including: online lending, unsecured business loans, secured business loans from banks, venture capital funding, crowd funding, angel investor funding, soft loans from family and friends and funding from business associations. But what type of funding should you explore for your business?

The decision on the most appropriate source of funding or loans should be informed by the amount of money you are seeking, whether the funding requirements are long or short term, the availability of collateral, willingness to give out some of the equity in the business, availability of relationships that can be explored and even the flexibility of various options.

If you are willing to give off equity and are seeking a huge sum of money either in the short or long term, venture capitalist would be your best shot. In the absence of assets to use as collateral or a relationship with a financial institution, unsecured loans or soft loans from family members and friends would be ideal. Bank and other financial institutions prefer businesses that have a good credit history, those that have assets that can be used as collateral and a regularised pattern to income to cater to the instalments. On the other hand, there are online sites where your business only needs to convince people to donate money- these are especially common and ideal for charitable work.

Top sites to get business funding

In most cases, the best sites to acquire business funding will be dependent on the sector or industry of operation, the current stage on the growth curve, the amount of money you need and the amount of time you need to repay the money, where applicable. However, overall, here are the top sites where businesses all over the world can get funding: Kickstarter, GoFundMe, Fundable, iFundWomen, CircleUp, Republic, Indiegogo, Kiva, Seedinvest, and Patreon. As you sign up to these sites, it is good to note that their mode of operation and their terms and conditions of engagement differ.

As you evaluate your options, it is good to understand what the short and long term effects of different types of funding are. As such, it is essential to work closely with a business finance specialist who will help you unpack all these options and assist you in making the most viable decision. In most cases, founders and business owners are so excited about the funding opportunity that they may overlook the details in the contract that may unleash unpleasant surprises later on. Therefore, an independent advisor is a necessity. It is also good to take time to evaluate all options in detail as a deal may seem good at first site only to prove otherwise. On the other hand, a deal that may not capture your attention at first glance may turn out to be the best deal.