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Loans

Whether you are about to establish a new business or looking to expand your existing one its imperative that you have sufficient funding to see your business grow. Without it your business will fail. See our Business Guides section for ways of securing funding including regional and EU funding. However, for many businesses the most straightforward way of raising finance is a loan either in your name or in the name of the business. As with any loan or overdraft it is important that you understand the interest rate you will be paying and is well worth shopping around to make sure you get the best deal. Here are our top 5 tips for financing a small business:-


1.	Make sure you have more money than you need
	Most small businesses only get one chance to raise money so take a real good look at your requirements and, where possible, plan for things not going as well as you had intended. Its pretty difficult to get a second tranche for funding once you have lost the credibility of having got the figures wrong the first time, so make sure that you are not too conservative in looking for the money that your business needs.

2.	Shop around
	Whilst Banks offer very competitive finance rates it may be that there are better or more fitting alternatives when it comes to raising money for your business. It may be that you can use some equity in your house or an overdraft facility for funding or that, for equipment such as your van, renting or leasing offers a more cost effective option. If a loan is the best solution most Banks will also offer a limited period of free banking to new businesses and offer an amount of advice and tools to support you. Finally, never be afraid to ask for a discount. Everything, including Bank loans, is negotiable.

3.	Money in the Bank
	A sale can't count as a sale until it's been paid for. Make sure you've got the money in your Bank. You need to set up strict payment procedures right from the start and only give credit where credit's due. Many small businesses are taken down by disreputable payers.

4.	Keep you forecasts up-to-date
	Always keep track of what you.ve agreed to spend, what your likely income is and, if you can, get a good bookkeeper to help you do this on a regular basis. When cash becomes tight, forecasting may even need to be done on a daily basis.

5.	Keep on talking
	Make sure your customers, your Bank and your suppliers always know where you.re at. Sometimes the Bank or a supplier may be in a position to give you advantageous terms to help you over a short term blip but only if you.re talking to them. No one likes nasty surprises.