Small Business Saturday Blog

Finding alternative sources of finance for your small business

Thursday, December 17 at 16:04Finance | Top Tips

With 73% of SME owners aiming to grow their business over the next two to three years, the demand for funding has never been higher. The daunting task of finding funding can be confusing and many SMEs are not the right fit for traditional bank funding. There are an increasing number of alternative funding platforms available and small business owners have the opportunity to flourish even without funding from the banks.

The next task? Finding the right funding for your business. Alternative finance has become a competitive market with a variety of lending types and lending platforms so don’t rush into anything. Finding the appropriate funding may seem a lengthy and confusing process, but there are ways to ease the journey:

1. Plan ahead
Make sure you’ve got a solid business plan and be meticulous about your numbers - estimates and approximations simply won’t cut it. An accurate plan will highlight exactly how much money you need and where the money needs to go. There are over a hundred alternative funding platforms, some of which specialise in particularly niche areas of business, so a detailed plan will point you in the right direction from the outset. Verify your facts and figures in order to ensure that you don’t fall at the first hurdle.

2. Organise your financial documents
When approaching alternative funding platforms, having your financial documents organised and at the ready will ease the process and you’ll receive funding much sooner. Whilst these lending platforms are not as restrictive as the banks, it is still important that you provide accurate information such as bank statements, VAT returns and company accounts so that they can help you in the most effective way. Try to have important figures at your fingertips: What does your business turn over annually? What is your business’ credit status? How many sales do you process with credit/debit cards? It’s a good idea to keep track of your company’s data and work out a system for organising important financial documents. It may seem a dull task, but it will be worth it and funding platforms will take you seriously.

3. Be realistic
It’s vital to remain realistic about your financial abilities when exploring your funding options. Committing to an oversized loan will only cause unnecessary stress when it comes to paying it off at the end of each month. A loan should serve as a benefit not a burden, so examine your figures to work out the amount of funding that you can comfortably pay back each month. Precise planning should provide a realistic indication of how much money you need to help your business grow without causing financial strain.

4. Understand and compare your options
Don’t rush! The variety of funding platforms in the industry is great news for SMEs but the immense quantity of them can also be overwhelming. There are so many platforms to choose from so make sure you take time to weigh up your options and don’t rush into the first lender you come across. It has become a fiercely competitive market so check through your options with an intermediary or by contacting the lenders directly for reassurance of your decision.

Fundbird is here to help you navigate and find your way around the various alternative lenders. Through using our online platform, SMES will be directed to the best matched lender based on their business needs. Fundbird provides free tools that can help you with this process, including an e-book, personal consultatation and online matching to help you find a lender via the website

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