Feature


Business Banking & Finance


Seeking finance to start, grow or even remain?


By Dr Steve Walker (pictured), chief executive at ART Business Loans T


here continues to be much written about the now numerous funding sources available to businesses to help them meet their objectives. These days it is far more usual for businesses to find


what they need from a variety of different sources as a package of finance. The banks still remain as the largest providers, but not in all sectors of the market. It is also fully recognised that there are gaps which


remain to be filled, especially at the smaller end of the market with debt or equity up to £150,000. This is worse when businesses are at an early stage seeking to grow, or located in underserved areas and communities. With the explosion of alternative sources of finance,


a bewildering number of sources of advice as to where to go have also emerged. Many of these regrettably have to be treated with caution themselves as with rapid changes, and in some cases sponsored places, the information can become quickly out of date or inaccurate. So care should be taken when looking at the examples of interest rate charged. Business lending, unlike personal lending, is still unregulated. Look for the Annual Percentage Rate charges first and do not be deceived by quotes such as ‘the interest rates are attractive from two per cent to six per cent’. These are more likely to be per month APR 24 per cent > 72 per cent minimum. I would also suggest that businesses should be wary


if offered substantial funds very quickly with little examination of their proposal. As a starting point the best source of information on


types of finance, not the actual sources, remains the British Business Bank and ICEAW guide produced in collaboration with many others.


Visit: www.thebusinessfinanceguide.co.uk To seek local sources, including grant sources, the


Growth Hub will lead you also to broker introductory sources.


Visit: www.gbslepgrowthhub.co.uk/funding-finance There are now more businesses seeking finance than


at any time in the last 20 years according to latest research reports. But whether starting a business, growing or just keeping going, there remain a number of basic guidelines in my view whatever source of finance you are seeking. These are:


• Seek advice and help with your approach – this is available from many different sources: brokers, accountants, incubators, universities and business networks to name bur a few.


• Test your own assumptions, but at the very least understand how you are going to repay debt or provide a return to an equity investor.


60 CHAMBERLINK November 2019 Over the past few years I believe that the quality of


approaches for loans has improved, but there are still far too many failures in business which are a direct result of a lack of understanding of the implications of taking on board finance that could have been avoided. What additional steps to those already mentioned


can businesses take to make sure that their request for finance has a greater chance of success? I suggest:


• Read carefully the conditions being used by the lenders and the sectors they serve


• Prepare well and send all the information required at the same time


• Know your business and the financials in readiness for questions


• Remain enthusiastic at all times (not an unusually difficult task for an entrepreneur).


• Question if declined or discouraged as to the reasons and try other sources such as Responsible Finance Providers who lend as an additional source of finance where the banks are unable to support fully and in many cases target underserved areas and communities.


For more information on these see: www.findingfinance.org.uk


Get advice and help with your approach to seeking finance


‘There are now more businesses seeking finance than at any time in the last 20 years’


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