- Business Development Consultant
- +44 (0)330 124 1399
- Email John[email protected]
Suggested:Result oneResult 2Result 3
Sorry, there are no results for this search.View all people
In 2019, John Walsham joined Kreston Reeves following a 36-year career with one of the major UK banks. He has worked with businesses of all sizes helping them secure funding. Here, he offers a unique insight into the funding options available to fast growing businesses.
Businesses may, to an outside observer, look very much alike, perhaps operating in similar sectors and being the same size. But, just like the people they employ, no two businesses will be the same.
So when a business is looking for funding to support continued growth, no one size fits all approach will work. Responsible lenders will want to review a wide range of factors including, understanding the business model, its vision and goals, sector dynamics, assets held by a business, and the owners’ commitment before making a lending decision.
With this information, funding will typically fall into one of the following options.
Overdrafts will be familiar to most businesses and they are, at their most basic, a line of credit agreed for a predetermined period of time. They are flexible and relatively quick to put into place.
A loan is typically agreed with a specific aim in mind – for example, to purchase a property, business assets or research and development. Repayments are fixed, which helps with budgeting, and can be for terms of up to 25 years. Businesses should review their loan commitments regularly, comparing rates and the options to redraw a loan having made payments over a number of years.
Invoice discounting enables a business to immediately access up to 90% of the value of an invoice, aiding working capital. The facility will typically grow with the business assisting further expansion.
Some lenders will view a company’s purchase orders as tangible assets and lend against them. The lender will want to track the end-to-end transaction and understand the ‘who you buy from and who you sell to’ question – before agreeing to lend.
Machinery and equipment are integral to many businesses but finding the cash to buy them can be challenging. Asset finance options allow a business to obtain the equipment needed to support continued growth via a number of alternatives including leasing, hire purchase, and sale and leaseback.
Bank funding will not always be at the right level or with the right rates, so businesses will often look to other sources of capital.
The most common routes are:
There are many different funding options for fast growing businesses, all of which will have implications on future activity. It is recommended that businesses take independent advice from their accountant before making a commitment.
For more information contact John Walsham, our Business Development Consultant who can advise you with your inquiries.
Share this article
Our complimentary newsletters and event invitations are designed to provide you with regular updates, insight and guidance.
You can unsubscribe from our email communications at any time by emailing [email protected] or by clicking the 'unsubscribe' link found on all our email newsletters and event invitations.