Funding options for your small business

By October 6, 2016September 7th, 2018Business Planning & Strategy, Funding, General Business


“How do I get funding for my small business?”

A familiar problem for many SME owners is how to secure funding for their business. This may be funding to expand operations by hiring new staff, fitting out a new office, or acquiring a new car. It may be funding to finance the removal of an old business partner or to help fund the buy-in of a new one. It could be to fund the acquisition of a competitor.

Regardless of the reason why the SME owner needs funding, what is common for many is the inability to organise the funds they need in a timely manner. For some they are unable to organise the funds at all.

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Without naming names, the big banks do tend to have a very old-fashioned view of the world. Applications for small loans (even those for company credit cards) are endlessly long and complicated and don’t often yield the desired result even after waiting months for the application to pass through the approvals machinery of a big bank. Add to this the banks may not tell you why the application failed yet still leave you with the black mark against your credit rating due to a failed application.

Fear not, there are other options available to you. Two key ones spring to mind.

Private lenders

There is a huge network out there of wealthy individuals who are looking for places to invest their money outside of the regular financial institutions. Many tend to be open to more risk than the big banks and many will have an understanding of how SME businesses work. These types of lenders work in a few different ways, some will lend directly (less common), whilst others will pool their funds and have a broker loan the money out (more common). Interest rates are typically competitive and most loans are relatively short-term (under 5 years).

Fin-tech lenders

These are the new players in the market and are looking to disrupt the big banks when it comes to small business lending. There are a bunch of them operating in the marketplace, but what they all tend to have in common is simple application processes, quick approvals, short loan terms (e.g. 1 year), moderate interest rates and relatively loan maximum loan amounts (e.g. $250,000). Some of the main names include Moula, Kikka Capital, and Prospa. You could try Valiant Finance as a way of reviewing all your options in the one spot, their online tool is very handy.

So if you’re looking to expand your business and require funding, but no longer want to play with the big banks, there are options out there for you.

Please note that we are not affiliated with any of the above mentioned lenders, nor are we are endorsing or critiquing the offerings available, we strongly recommend doing your own research on this. If you’d like to discuss it further, please get in touch today, we’d love to help.