Sport — July 11, 2017 at 11:22 am

Creative ways to finance business expansion

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In our recent blog What difference has Brexit made so far? we looked at the different ways in which Brexit is already impacting the UK economy. In that article we also confirmed the commitment of Fair Business Loans to support small businesses during these uncertain times; a commitment that has earmarked £2m of funding for hundreds of small businesses throughout the UK during the next 12 months.

This is excellent news for small businesses, who often suffer from what could be termed the scale-up gap. It is estimated that around 600 start-ups are launched every day in London alone. But often the main stumbling block that these businesses face is when they are ready to grow but can’t then obtain the financing to do so.

In addition to unsecured business loans – which we will return to later – there are various other ways that you can try to finance business expansion in these turbulent times. Let’s take a look at four alternative ways of raising finance:

Grants and regional funding

There are various grants and regional funding options around, and whilst many are for very early stage development rather than growing a more established business there are exceptions. It may be worth investigating The ScaleUp Institute for help and advice. Also be aware of the British Business Bank which is backed by the Government and aims to complement big bank lending, and the Business Growth Fund which invests equity funding to help all kinds of businesses scale.

Project-based financing

The idea behind project-based financing is that rather than looking for general business funding, you focus on one specific aspect of your business and just seek funding for that. Investment in the project is repaid from the cash flow generated by the project. This investment can be raised by various means such as invoice factoring or cash advance loans: the key thing is that everything is tied in to the specific project in hand rather than the business in general.

New partnerships

Behind the scenes it appears that alternative, and more informal, partnerships are forming between British companies and their European counterparts. Many British companies are finding that collaboration with local businesses is enabling them to penetrate and remain competitive in European markets. Equally, the European companies are benefiting from the UK’s skills and abilities in manufacturing. Such partnerships enable resources to be exchanged in a mutually beneficial arrangement that enables both companies to grow.

Overseas investors

Interestingly, the continuing growth of UK businesses is attracting investors from all around the world including the Middle East and China. This increase in the number and origin of investors is giving some UK businesses the opportunity to find additional investments at a good valuation. However, there may then be issues about the amount of influence the new investor will expect to have in the business in which they have invested.

So if you are looking to grow your business it can be good to think outside the box and consider some alternative ideas for financing. None of the above are the perfect solution: they all have pros and cons that need to be weighed up. But perhaps one of them might fit with your business goals and be worth pursuing.

Reading through the above you may decide that an unsecured business loan is the best way forward for your business, in which case why not get in touch with us at Fair Business Loans? We have made clear our commitment to continuing to provide funding for small businesses, “to ensure businesses can access funding even in challenging times”.

One small business that we have helped in recent times is Dark Bunny Tees. The business needed to expand from a home-based enterprise to one that is based at separate premises, and at the same time it took on more staff and began to distribute over a wider geographical area. Ambitious growth in uncertain times but we helped to make it happen! You can read more details about Dark Bunny Tees and various other businesses that we have helped on our Case Studies page.

If you would like to discuss any aspect of your business growth with us then do get in touch with us and we will see what we can do to help.

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