Different sources of funding
It doesn’t matter if your business is large or small, sourcing new funding streams is a constant challenge. Whether you’re seeking funding for start-up costs, expansion capital, or simply as a bridging loan to solve cash flow problems, you’ll need to think creatively when financing is involved so it’s well worth finding the best accountants in London for your needs. Here we outline sources of funds, from the tried and tested to the innovative and creative, that will make small business funding a breeze.
Three Tried and Tested Solutions for Small Business Funding
With these tried and tested solutions and the help of good accountants in London most businesses can use these different sources of funding:
If you’re passionate about your idea, then a great way to get small business funding is through something known as ‘bootstrapping’. Unfortunately, ‘bootstrapping’ is code for self-funding, but there are loads of ways this can be achieved:
- slow growth through the use of your business’s internal cash flow
- personal savings accounts
- careful use of zero interest credit cards
- leveraging personal assets to free up capital
- taking out a business loan
Get the help of good accountants in London to design a suitable business plan with well thought out forecasts to reduce the level of risk.
- Source a Business Grant
These schemes are usually publicly funded and can be anywhere between hundreds to hundreds of thousands of pounds. The great thing about these cash award schemes is that you may well not be required to pay the money back and often won’t be required to pay interest or give up equity either, depending on the scheme.
With small businesses traditionally driving economic recovery, these schemes are a great source of small business funding. The best accountants in London will help you find the right grant solution for your business needs.
- Find yourself an Angel Investor
Going on Dragon’s Den might seem a bit far-fetched but they are not the only so-called ‘angel investors’ out there. In fact, investment from angels (high net worth individuals who invest their own capital for an equity stake in your business) is the most significant source of small business funding, with an estimated £1.5-billion invested in this way annually in the UK alone.
Unlike publicly funded business grants you’ll be expected to offer a return to the investor, usually within 3-8 years. With the help of the right accountants in London, you’ll be able to get connected with potential angels and receive expert advice you need to be investible.
Three Innovative and Creative Solutions for Small Business Funding
If the tried and tested methods above sound too risky, or you’ve already tried them all without success, below are three more inventive solutions. Whatever option you choose it’s worth looking around to find the best accountants in London that can assist you to find solutions for funding your start-ups:
With plenty of platforms offering crowdfunding connections, it’s well worth looking into whether financing your idea could be funded by the people you hope to sell to in the future. In this sense, it’s a great way to get your idea validated. Moreover, it can be a low-cost marketing strategy that organically builds a community of people with a shared desire to see your idea succeed.
The great benefits of this funding stream are the low financial risk involved as, if successful, this route means you won’t need to get a loan or front up the cash yourself nor give up any equity share in your business. It’s still worth chatting with good accountants in London to ensure you have a detailed business plan on how to best use the crowdfunded money if successful.
- Get a Peer-to-Peer Loan
Peer-to-peer loans are usually obtained via websites which link individual borrowers or businesses with savers seeking good returns on longer-term investments. Sometimes known as crowd-lending, these schemes cut out the banking middleman meaning borrowers can get lower rates of borrowing, whilst investors also get a higher rate themselves.
There is a small fee to the website and you’ll need to pass credit checks and a risk assessment to be accepted on to these sites. This means it’s well worth spending the time to find the best accountant in London with experience in this sort of loan.
- Invest in the Best Accountants in London
If you’re looking for creative solutions to your struggles with business financing, then the best accountants in London will be able to provide you with a whole range of creative solutions. Good accountants in London will be well connected with individuals and organisations seeking to invest in viable business opportunities and help you show your business is investible.
Jinesh is a Senior Business Accountant, with a masters in Finance from Westminster University, and specializes in tax and accounting for small to medium businesses with a turnover less than £ 3 Million.
He specialises in helping creative businesses understand and manage their accounting and tax needs and obligations.
As accounting ecosystems evolve, their potential to add value also grows. This has increased the focus on digital solutions to tackle complex business problems. Jinesh helps businesses see the opportunity in this and helps businesses become more efficient and increase performance, using the right solutions.
Some of the key things he focuses on are:
- Helping businesses gain insights from their business data
- Providing complex tax and accounting solutions
- Helping businesses prepare for complex industry developments and changes