Something that all business have in common is that there were, at some point, a start up venture. SMEs and giant corporations were at some point in the same position, seeking finance to help them get off the ground. Cash is the one thing that all businesses need to get the ball rolling. Without funds poured into a business, it’s very unlikely even the best idea will catch on. So, how can businesses find finance when they’re just starting out? Personal funds, bank finance and invoice finance are three important options.
Most often, business owners will fund their start ups with their own money. This is risky, as putting everything you own into a new venture could pay off, but equally you could lose everything. Businesses are obviously not guaranteed successes, especially in tough economic times of limited growth, and when consumers and businesses are looking to rein in their spending rather than splashing out.
Another common route to start up finance is going to the bank for a business loan. This may be able to provide working capital for the short term, but with banks looking to decrease their risk and balance their books, this type of finance could be hard to access. Banks also require security and some sort of trading track record before they will lend, so this again might be hard to access.
Invoice Finance and Alternatives
Asset based finance through hire purchase and finance leasing can be used to fund fixed assets such as machinery or property. Or, there are finance options such as angel investors, microfinance or crowd financing.
Factoring can also be essential for a start up’s financing. New businesses will be able to release cash from invoices as soon as they are produced, getting cash within 24 hours rather than waiting months. Many businesses fail even with full order books just because their cash flow is so slow, and funds are not released quick enough. Late payment is a huge problem for business start ups, and factoring and invoice discounting can go a long way to solving these two problems.
If your start up business needs funds flexibly, quickly and securely, then Select Factoring have a range of solutions that could help.