3 innovative ways to raise cash for your business – without asking the bank
Great ideas alone are never sufficient when it comes to getting a new business off the ground. You will need to draw up a budget, raise capital and have some money in reserve for stock or unforeseen emergencies. Here are three ideas for accessing cash.
- Logbook Loans
Sometimes the bank just doesn’t make a decision quickly enough when processing a loan application. If you’ve started a business and need access to cash, you may find that you are among the many thousands of small business owners who fall foul of the new Financial Conduct Authority’s (FCA) lending restrictions, and that a late payment on an utilities bill or credit card has affected your credit score. Logbook loans can help in these circumstances.
These type of lenders are only interested in the value of your car. They don’t care if you have CCJs or a low credit score, all they worry about is the age of your vehicle, its condition and its value. They will lend you up to 75% of the value of your motor and, if approved, you could have the funds in your bank account within an hour. Obviously the greater the value of your vehicle, the more credit that you can access. Loan repayment is weekly or monthly and all terms and conditions are clearly marked out on the company website.
- Start-up grants
If you’ve managed to gather the bulk of the capital necessary for your business but could do with some additional cash and advice then the Better Business Finance website is worth visiting. This site can lead you to business mentors, and guide you to where you might be able to access a business loan.
If you’ve been trading for under two years, it’s well worth looking at the Seed Enterprise Scheme, which offers tax relief to potential investors, making this a very attractive option for all parties. The government backed Start Up loans are another useful option. The loan must be repaid within five years and it commands an interest rate of 6%. Take a look here to discover more.
A Google search for business grants might reveal other options, including the Prince’s Trust for younger entrepreneurs.
- The power of the crowd
Crowd funding is one of the current buzzwords for those looking for business finance. You place information about your business online stating clearly what the funds will be used for and the potential rewards to investors if your project gets off the ground. Use social media and any other forms of online advertising to make the public aware of your project.
Potential investors must be made aware that should your project fail, they will lose their investment. Some investors would rather receive their name on the company website or free tickets to an event rather than funds. Crowdfunding really took off in 1997 following Marillion’s search for funds to embark on a US tour. Projects on the sites vary and more information about crowdfunding can be found in this article from The Guardian.
It’s important to never lose sight of your dream when raising funds for your company, and if your vision is viable, you should eventually be able to raise the necessary finance.