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Raising Money

Crowdfunding new HMRC EIS GuidelinesWhen it comes to start-up investment, the UK has some of the best tax relief schemes anywhere in the world.

The Enterprise Investment Scheme (EIS), along with its earlier-stage sibling the Seed Enterprise Investment Scheme (SEIS), offer protection of investments in UK start-ups. If the business fails, investors can claim up to 80% of the investment as tax relief against their income tax bill. Continue…

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bridgning loan explainedA form of finance which is rapidly gaining popularity in the UK business market is bridging finance. Around £750 million was borrowed through the means of bridging in the year 2011, since then it has only gone up where in 2016, this number went up by £4 billion.

The way bridging loans work is that they allow a business (or an individual) to access large sums of money within around 2 to 4 weeks. Continue…

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Finding investors to support fledgling businessOne of the biggest obstacles to growth for start-up businesses is investment. Investors are often reluctant to commit their money to a new business with a promising idea but no track record of success.

Fortunately the Government lent a helping hand in 2012, and introduced the Seed Enterprise Investment Scheme (SEIS) to help smaller, riskier companies attract investors willing to take a punt on a bright idea becoming a successful business. Continue…

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How to get the right business finance Any time is a good time to start a company, so said renowned American angel investor Ron Conway.

That may be true, but how easy is it to find the necessary funding?

The answer largely depends on your understanding of how fundraising should be done.

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ow to attract investors to back your tech businessVenture capital money going into technology companies in the UK is at an all-time high. A year post-Brexit referendum, British tech firms attracted £2.4bn in funding.

To date this year, UK fintech companies alone have seen £825m of VC investment.

So, what do investors look for in tech start-ups and how do you get a slice of this funding for your technology venture? Continue…

Getting finance for your business is no longer just a case of approaching your high street bank manager and asking for a loan.

The market is now much more varied, and boasts a huge range of products which have been tailored for more specific purposes. This means that depending on your requirements, it’s easier than ever to find funding that fits your business – if you know where to look.

Asset finance is one such funding solution, but what exactly is asset finance and is it a good option for your business? Continue…

How to get funding for your startup businessEverybody understands that starting up a business from scratch is not a simple process or an easy challenge to take on.

Regardless of how lofty your ambitions are or whether you’re aiming to establish yourself as a sole trader or as a the boss of a burgeoning new enterprise, finding access to initial and early-stage sources of finance is a vitally important step along the way towards sustainability and success.

Here’s a look at some of the most commonplace and most viable routes to finance currently available to startup businesses and the entrepreneurs behind them.

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When the bank won't fund your businessPROMOTED GUIDE – This is a promoted guide from Funding Xchange – the business funding marketplace where lenders compete to fund your business. Get Funding Now!

If you have approached your bank and found it difficult to secure the funds your business requires, you’re in good company. Banks are declining up to 50% of loan requests from some smaller businesses.

Banks’ lending decisions have very little to do with you or the prospects of your business. And their outdated processes and high costs of capital make it difficult for them to lend to smaller businesses.

Business owners are also being frustrated by the inability of banks to provide flexible forms of credit to businesses. This is highlighted by the fact that the availability of business overdrafts, long a favorite tool for businesses to smooth cash flow, has shrunk by more than 30%.

So where else can you get funding for your business?

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There are lots of things to think about if you’re considering taking out a business loan.

The UK’s business lending market includes a wide range of providers offering subtly different types of business loans. Some are aimed at a particular type of business, or companies of a certain size or those operating in a specific sector.

With a wide range of business loans available it’s important to first get a basic understanding of the different options you have when it comes to borrowing money to fund your business.

Here are some of the key considerations you need to bear in mind when sourcing a business loan for your firm. Continue…

raise funding through alternative financeSince the recession of 2008/2009, there has been a significant reduction in the ability of banks to lend to British SMEs.

Whilst mainstream finance is still great for some businesses, many banks now have lending criteria that small businesses are unable to fulfill.

Fortunately, ‘alternative finance’ can offer a viable substitute for entrepreneurs looking for innovative and flexible ways to fund their business growth.

But before blindly assuming alternative finance is the answer to all your financial woes, there are six things you need to understand before you approach an alternative finance provider looking for funding. Continue…

Borrowing money from a bank to finance your business is a lot harder than getting a loan to buy a new car or to improve your home.

Banks have a number of tough rules that you need to know before you approach them for a business loan, and these rules have become even more stringent as a result of the credit crunch.
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If you are looking to start a new business, there is a good chance that you will need some funding to get it off the ground. Most businesses will have start-up costs, whether it’s securing premises, stock, equipment or hiring people, and they will all need paying for.

Some people might have savings, or a redundancy payment, they can use to fund their start-up, but others will need to find funds before they can launch their new business. However, as many prospective business owners find out, getting start-up finance can be difficult.

For someone who just wants to start their own business, negotiating the finance maze can be confusing and take up a lot of valuable time. So to help increase your chances of success, here are the answers to some common questions on how to fund a new business; Continue…

Many small business owners don’t know about the Bank Referral Scheme, but it represents a significant milestone for business funding in the UK.

But what exactly is The Bank Referral Scheme, how does it work, and how will it help businesses? We asked Conrad Ford, Chief Executive of Funding Options, to explain; Continue…

You have a great business idea and you’re finally ready to make it a reality. However, the next obstacle you need to overcome is to find the funding you need to get your business off the ground.

In recent years, the advent of alternative finance has brought startups new funding options, and driven an explosion in the number of entrepreneurs raising money through crowdfunding. Specialist crowdfunding websites have made it possible for anybody with a business idea to reach out to potential investors. However, crowdfunding success isn’t guaranteed, no matter how good your business idea.

If you’re thinking of raising money to kick-start your business through a crowdfunding campaign, there are some key steps you need to take before you launch your campaign. With so much at stake, we asked Indiegogo to reveal the 6 things you need to do and know before you launch your crowdfunding campaign;
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Young businesses and start-ups that are looking to raise funding have a dizzying array of choices nowadays. In fact, there has probably never been a bigger range of places to go for early-stage finance, from crowdfunding and angel investors through to government-backed start-up loans and P2P lenders.

But before we take a look at the options in more detail, it’s important to think about what sort of funding you’re after for your business, and what you’re prepared to offer in return. The basic division here is between equity and debt. Continue…

When it comes to selling a business, the most important question you need to ask is – how much is it worth?

There is no single formula that can be used to precisely value every private business. The seller will want to drive the price up, and potential buyers will want the opposite.

Although there are relatively easy ways to value certain parts of the business – such as stock, fixed assets (land, machinery, equipment etc.), there will very probably be a sizeable intangible element to the value of a business.
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The Albion Growth Report – a study of 1,000 SMEs which aims to explore the factors that help businesses grow and the issues that hold them back – has found that the popularity of bank loans and business overdrafts is declining.

Instead, business owners appear to be turning to equity finance and other long-term financing options in place of the traditional bank sources.

Continue…

One of the biggest challenges start-ups and fledgling businesses face is securing the funding they need to realise their potential.

A majority of business owners feel that finding finance is difficult in the current climate, and in particular, that banks are reluctant to provide business loans at competitive rates.

So to help you maximise your chances of getting that all-important business loan, we asked Rishi Khosla, the CEO and co-founder of OakNorth Bank – a bank that specialises in lending to entrepreneurs and growth businesses – to share his valuable insight and personal experiences with ByteStart readers;
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If you need more finance to grow your business, there are a number of options which you might wish to consider. You could turn to your own personal savings, ask family members for help, get a bank loan, issue shares, or speak to some business angels or venture capitalists.

Or you could consider peer-to-peer (P2P) lending.

P2P lending is fast becoming the norm for businesses needing finance to get an idea off the ground or raise the capital necessary to expand and take projects to the next level.

But whilst it’s become a more common financial avenue for SMEs to pursue, it’s still not as well-known as it could be. According to a 2014 Nesta Report, only 44% of UK small businesses have heard of P2P lending.

So what exactly is peer-to-peer lending and how can small and growing businesses use it to finance growth?
Continue…

When people talk about ‘gearing’ in a business, they are usually referring to one of two types;

  1. Financial gearing
  2. Operational gearing

Here’s a guide to what gearing is, and how you can use it to increase the returns your business makes;

Continue…

10 Top tips to ensure your crowdfunding efforts are rewarded

September 10, 2015

Business owners that are exploring some of the newer business funding options, commonly referred to as ‘Alternative Finance’, can sometimes struggle to distinguish between ‘crowdlending’ and ‘crowdfunding’, not least because they sound remarkably similar. Both describe ways of raising business finance, but there are huge differences between the two which need to be clearly understood […]

Business angels or dragons – who do you trust to invest in your company?

March 30, 2015

Looking for an investor to help fund your business? You’d better make sure they’re an angel, not a dragon! Most businesses require outside investment at some point in their development. Whether you are a new business needing a cash injection to get started, or an established company looking to launch a new product or move […]

How to get your customers to fund your business start-up

October 10, 2014

While “entrepreneur” may occasionally be a euphemism for “out of work”, there are more and more individuals working in earnest to start a business of their own. Indeed, statistics show no fewer than 400 million such individuals globally, with over 2 million in the UK and 20 million in the US. Sadly, many of these […]

Raising finance for your business

October 8, 2014

To raise money to grow your business, you have to convince likely lenders that your idea is profitable, or at least has the potential to be. Here, we take a look at two the two key elements that should drive your search for funding; The different types of finance available What lenders and investors look […]

How to get your business ready to sell – 10 things to do before you put up the for sale sign

April 30, 2014

So you want to sell your business? The place where you’ve spent more time than with your family; invested money which you’ve sometimes had to borrow in order to expand or buy new equipment; given your heart and torn out your guts; worked anywhere from 60 – 80 hours a week, maybe more; tackled a […]

5 things you should know if you want to attract business angels

April 22, 2014

Angel investors can be a lifesaver for a small enterprise – not only can they supply capital investment, but they often have years of valuable experience to offer a fledgling business. As viewers of Dragons’ Den will know, securing angel investment is no easy task. Although much of the BBC show is put on for […]

£100 million business funding scheme now open to all high growth potential companies

July 5, 2013

The Angel CoFund, which provides investment capital for businesses with the potential for rapid growth, can now be tapped by companies from all over the UK. Previously, only high-growth businesses in specific geographical areas of the UK were eligible for funding through the CoFund. However, a £50 million finance boost from the government’s Business Bank […]

What are business angels and how they can help your business?

May 3, 2013

Although it may not reflect ‘real life’, the BBC’s Dragons’ Den programme has done a good job in highlighting the role that angel investors play in the business world. It may seem counter-intuitive, but the ongoing economic downturn has actually resulted in an increase in business angel activity. As the returns from more traditional means […]

Guide to the Enterprise Finance Guarantee (EFG) scheme

March 27, 2013

The Government launched the EFG scheme to encourage lenders to provide further funding to smaller businesses following the credit crisis. In this article, we look at the how the scheme operates in practice, and how small firms can benefit.

Popular funding options for fledgling businesses

February 19, 2013

Many businesses will need to raise funds at some time – either at the start-up stage, or to finance expansion. With ‘traditional’ credit still in short supply and the possibility of a ‘triple dip recession’ in 2013, here is an overview of the various options open to small businesses looking to raise funds.

Crowdfunding – a new alternative for small and start-up businesses looking to raise money

February 9, 2012

Raising business finance is difficult at the best of times but in today’s age of austerity banks, business angels and governments are tightening their belts, cutting off the supply of cash which is leaving start-ups and growing businesses who need seed finance thirsty for money. As a result venture capital is being democratised.

Top 10 business finance tips for start-ups

November 16, 2011

When you are starting a new business you have a million and one things to think about. As a new business owner, many of the issues you will need to tackle, will be completely unfamiliar to you. With so much to do, you will need to learn quickly. If the financial side of the business […]

What are venture capitalists, and how do I attract their interest?

October 8, 2011

If you’ve ever watched an episode of Dragons’ Den – and find me anyone in business who hasn’t watched at least one episode – you’ve seen some venture capitalists in action.

Top tips on how to impress business angels

October 8, 2011

At ByteStart, we have come across hundreds of would-be entrepreneurs over the past decade. We have also had the pleasure of meeting plenty of angel investors and industry insiders. If you have a fledgling business, or an idea that you think you can turn in to a viable business, you might want a business angel […]

What are Venture Capital Trusts (VCTs)?

October 8, 2011

Launched in 1995, shortly after the introduction of the Enterprise Investment Scheme (EIS), Venture Capital Trusts allow individuals to invest in a range of small unquoted companies and spread their risk. Income tax and capital gains tax (CGT) reliefs are available to investors in VCTs.

Overview of the Enterprise Investment Scheme (EIS)

October 8, 2011

Created in 1994, the Enterprise Investment Scheme (EIS) provides investors with a series of attractive reliefs in return for investing in unquoted companies which may carry a higher degree of risk. How do companies and potential investors qualify to take part in the Scheme?