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Small Business Finance Options

Are you a small business finding it hard to get finance? There may be a lot more options out there than you think!

So, traditionally you may have put together a great business plan to put your finance case forward to one of the big banks – but you still can’t get the cash to drive you forwards. In the banks eyes, you may not have been trading long enough or your trading history hasn’t been as good as it could have been, (due to needing that hot-cash-injection you’re been chasing)! Here at Bear Loans we understand just how awful this catch-22 can be. You want to grow and be successful, but this money thing is holding you back.

Want the opportunity to invest in yourself? Here are just some of your options:

Personal Loans

As discussed, a new or growing enterprise that doesn’t have a track record of success, (yet) may be considered a high risk by banks. However, if you still seek the tried and tested way and you’re looking to borrow a relatively small amount, you may be able to secure a personal loan before taking your next big step.

The upside: This loan may be easy to apply for and quick, especially if you’re a start-up and this is a side-gig to your regular wage. This could provide that small boost you need short term, to kick start your dream.

The downside: There may be slightly higher interest rates and lower loan amounts. There may be penalties for paying it off earlier and you may be tied into this loan for longer, (possibly effecting your borrowing power in the future). If you’re not receiving a regular wage, securing this loan may be a lot harder. You may need at least two years’ worth of company tax returns to prove your eligibility.

Private Funding

This is when individuals can lend you money through a trust account. While it can be a little costlier than the average business loan, it carries the advantage of flexibility and could be for much larger amounts. Whether this is through your rich Auntie Daphne or an Angel investor seeking dividends in return, you need an experienced broker to help put this together. Without this you could be flying blind and opening yourself up to ripped off!

The upside: This loan could be for much higher amounts, with flexible terms that you and the investor are happy with and agree upon.

The downside: This isn’t the Dragons Den, this is real life with bigger pit falls – so you’ll need expert advice.

Raise the money

For some if us, crowdfunding could be an option. There are x2 types of crowdfunding:

  • Equity crowdfunding is where you offer up a share in your business as a return on their investment or;

  • Rewards crowdfunding is where there is more likely to be many people offering smaller amounts and in return they get a “reward.” This could be a pre-sale of your product or service in advance of your launch.

The upside: This could be a seemingly easy and low-risk solution with lower or no interest being paid. With reward crowdfunding you’re also getting to test the market for pre-sales before your launch.

The downside: If you choose equity crowdfunding you will need expert advice from a broker to get a solid investment agreement in place. Reward crowdfunding platforms can have very small success rates with some reporting as little as 3.1% of small business reaching their crowdfunding goals.

Debtor Finance

Debtor finance is a way of gain funding from your accounts receivable ledger as collateral. Most debtor finance companies are willing to lend 80% of a debtors invoice which will allow the business to gain access to the funds within approximately 7 days, rather than waiting for the invoice to be paid in 30 days.

Please see my Debtor Finance blog post for further information.

Talk to us

Here at Bear Loans we want to help you understand all of your options. We can tailor a financial product to your individual circumstances and by skipping the big banks you can potentially save yourself money and time. We can grant you access to a whole spectrum of choices that with our knowledge and understanding, may suit you better. An experienced and qualified broker can look beyond the usual ‘interest rate formulas’ to help ensure the future prosperity of your business.

Call us for a chat today or email us to setup an appointment.


This information is not to be relied upon without speaking to your finance broker, tax agent and financial adviser.

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