Resources Guides 08.12.16

Finance a Business For Growth

I need a loan to build my business…

British business is now booming again, with the number of new UK companies beating all recent records. But to build on (and often ensure survival) after their first year, many of the tens of thousands of start-ups will sooner or later enquire as to the best way to ‘finance a business,’ driven by the need for fresh capital to finance existing facilities or expansion on their way to beating the competition and sustaining success.

The money could be for new technology, more staff, fresh premises, new products, fresh markets . . . anything that will guarantee up-and-coming businesses a chance to build.

It’s easy to underestimate just how much finance you need to keep a business ticking over, let alone growing, at whatever stage in its development. To gain the desired loan, you will need to rework your business plan so you know exactly how and when you will spend and repay your lender’s. Do you know the true value of your business? Are you undertaking due diligence to avoid unforeseen hurdles. Business growth may be desirable or just plain essential – ignore the chance to expand and competitors can leave you behind.

Where do I start seeking cash?

The capital finance market as a means to finance a business is hard to navigate and the sharks will see you coming if you don’t take professional advice. So take time to decide who should advise you. Approaching a bank direct is one option but choosing an accountancy practice, such as Carter, Backer, Winter, guarantees you unbiased advice and access to a network of specialists in independent audit, tax, accounting and consulting firms across 80 countries – all of them members of the international accounting alliance, DFK. And then there’s our access to the capital markets and contacts to help you too.

How do I begin my capital financing application?

We can tell you what your peers are doing and what sort of special rates they are being offered, provide a review of your business and tax efficiency and forecast your ability to pay back debt. And we can also help you produce a thoroughly researched business plan plus other documentation you may need to convince serious lenders  – who we can source for you – that you are able to cut down on risk and make a profit. Otherwise you could be labelled “high risk” yourself and be shown the door rapidly!

What sort of capital finance do I go for?

There are four main options: a term loan (fixed cost); an overdraft (day-to-day expenses); a mortgage (for more premises); and invoice finance (the lender buys say 85% of an invoice – literally paying you upfront and then collecting from your client and taking a percentage of the deal)

If none of these methods appeals or offers the required lending terms, crowd funding (raising funds from a large number of people over the internet) is an alternative; it has successfully funded a wide range of projects, including new song albums, films and video games.

Another route is through an “angel investor” (similar to the “dragons” on the BBC TV series, Dragon’s Den). They are generally rich entrepreneurs who fund business start-ups for a share of ownership equity. They often undertake high risk ventures and as such favour projects with well qualified advisers on board, such as accountants or other professionals.

Mainline venture capital firms are an alternative too. You’ll need a strong business plan, clarity in your forecasts and outlook and solid market evidence for growth if you want help from them. Be prepared to give up a sizeable percentage of your company too! This isn’t a route for the faint hearted and can be a challenge for the first time entrepreneur.

Or you can look to internal investors, raising money and incentivising your staff at the same time by offering them shares deals for sale or for free. A loyal workforce goes a long way in convincing funders you have a future. Or we can help you consider the more radical step of a management buy-in or buy-out?

We can also advise you on the plethora of government business support schemes, such as grants, finance and loans, including funding for small and medium-sized businesses and start-up companies.

What about my credit rating?

This will affect how much a lender will loan you, so take essential measures like ensuring your present address is on your electoral role, paying off your credit card on time and reducing any payment you find difficult to meet to an acceptable, smaller sum you can manage. Don’t take on too many debts all at once (eg buying furniture on credit and a mobile phone contract). If in doubt, we at CBW can advise you on best practice.

Can I take out insurance on a loan if I cannot repay on time?

If you fall ill, get injured and cannot work or are self-employed and go out of business, you can take out payment protection insurance or alternatives such as life insurance, income protection or serious illness cover, depending your circumstances.

There are so many finance houses out there. What about value for money?

Whatever the problem, we have the expertise to find a solution. We’ll ensure that we negotiate the best financial terms for you, wherever possible through a competitive tendering process, and that any loan deal is completed on time with minimal disruption to your business.


If you would like to secure capital finance to finance a business and expand, please call us to arrange a free consultation on 020 7309 3800 or email us at: