Your new business could be financed in a number of different ways and quite often a combination is used. You can consider:

  • Personal monies – savings
  • Conventional bank finance – overdrafts, commercial mortgages, business loans, commercial investment mortgages
  • Asset finance – hire/lease purchase, finance lease, operating lease, contract hire, sale and leaseback
  • Invoice discounting and factoring
  • Equity finance
  • Private investors – business angels
  • Grants

There are numerous types of business finance available from a whole variety of lenders.

Preparation is part of the key to success in raising bank finance and securing the right price for the transaction. A well prepared and structured business plan with professional input is invaluable.

Independent assistance in raising finance will ensure lenders offer their best price for a transaction as they will know that they are in competition with other providers.

Asset finance can play an important part in the funding of any business. You should consider that by borrowing on loan from your bank for say the purchase of a vehicle, which could be financed on lease purchase, then this could potentially impinge on your ability to increase overdraft facilities to support your business’s growing working capital requirements.

Invoice discounting and factoring play an important part in funding the working capital needs of many businesses by immediately advancing monies against an invoice value. You do not have to wait 60 or more days to get paid and therefore your business cashflow is under control, which is vital in the early growth stage.

Another option is to consider external investors. They will want a share in your business in return for their investment and a repayment plan for the monies lent, but they will also bring expertise that you may desire to the business.

Variable rates, fixed rates, caps and collars; there are numerous interest rate products to consider. With expert advice the terms and funding types need not be confusing. Getting the finance structure of your business right needs thought and care.

Depending on your business and its location, then there may be grants or subsidised loans available to you. As the type of grants and the available funds change so often we recommend a conversation with your local support organisations to establish if any applicable grants are currently available for your business.

Key considerations in relation to your choice of finance should be:

  • Speed of decision
  • Price – interest rate and fees
  • Security required
  • Convenience
  • Flexibility
  • Quality of service

You will improve your success in raising finance if:

  • You know who to speak to
  • Ask for the right type of finance for the transaction
  • Understand business gearing
  • Understand interest cover
  • Have a good credit history
  • Obtain professional advice


We work closely with the banks, brokers and other service providers who can help you raise finance. As a starting point, you may wish to establish some of the options available to you by trying our Business Finance Finder

Sage Accountant Partner Logoiris kashflowFreeagent