The means in which you finance your business must be an important consideration. The three most popular ways of raising capital are through shareholders’ equity, reserves or borrowed funds.
If you decide to raise capital by borrowing money then you will need to determine what source and type of finance is most suitable for your needs.
The purpose for which the finance will be used must match the method of funding and term of the loan. You must be cautious when deciding upon your financing decisions as these choices will have a serious impact on your business cash flow and tax obligations.
Raising finance for a business ranks closely behind the sale of a business in its complexity. The problems facing small business owners in raising finance are well publicised, however most of these issues can be overcome with a well prepared finance application.
There are five stages in our finance application process:
Determining and understanding the financial requirements of the business.
Structuring the business and the borrowing entity.
Identifying relevant sources of finance.
Approaching the sources with a sound case for finance.
Negotiating the terms of the finance contract.
Often external finance is not the only source of funds, we can help with other methods such as private equity funding, joint ventures, limited partnerships and government funding.