Sourcing Funding

Be realistic

Prepare your business plan, and take advice from business support providers, like your local Business Link. Remember your plan should include the finance you’ll need for cash flow, as well as any assets you need to purchase.
Before you seek any funding be very clear about how much you will require and don’t underestimate. Nothing undermines your credibility to sustain the business, as much as having to go back with a revised requirement.

Obvious sources of finance, like bank loans, are not always the best - start with the cheapest first, like your own savings, family, friends, and sometimes business contacts can be a good source. However never use your credit card to finance your business, this is the route to bankruptcy. Interest rates are such that there is always a better option.
Grants are not easy to come by in the South East but talk to Business Link for advice. Also there are some programmes available in specific areas, like the New Entrepreneur Scholarship programme www.nesprogramme.org.uk
If you need commercial finance look at leasing, factoring and long term loans, which are cheaper sources of lending than an overdraft. Also ask your bank about the government backed Small Firms Loan scheme if you’re unable to secure a conventional business loan.

Potential lenders need all the facts. If your lenders at any stage feel details are unclear or misleading, their withdrawal of support could land you with a big hole in your finances.
If you do have bad news, lenders would rather know than be kept in the dark. Very often they will want and be able to help you overcome the problem.

Helen Lazarus
Head of Development and Projects National Federation of Enterprise Agencies
www.nfea.com

For more useful tips and suggestions, why not visit the Business Link website? www.businesslink.gov.uk/southeast