Small Business Saturday Blog

Five things all SMEs should know when applying for funding

Monday, February 08 at 15:08
Finance | Small Business | Top Tips

1. Business Plan
Never under-estimate the value of producing a comprehensive business plan; it does two things. First, it is a good discipline for the company’s management because it forces them to understand what they need, to think about why they need it and in what form; e.g. should they be looking for an overdraft or a term loan? Second, and most important of all, it demonstrates to a lender that the management understands its business and takes the lending process seriously.2. Understand your cashflow
A realistic cashflow forecast is probably the most crucial element in a business’s financial arsenal. Understanding where the cash goes allows a business to identify what the money is needed for. It might be to finance growth through the purchase of machinery or another asset, or to provide day- to-day working capital? Either way, you can guarantee that the lender will need assurance that (a) you understand what the money is needed for, how much and for how long and (b) that your business will generate sufficient surplus to pay the money back when you say you will. 3. Know when to apply to fundingOften new or small businesses wait too long to apply for funding, resulting in the business being put under financial pressure and making a rushed decision that could end in a poor choice of lender or type of finance; e.g. in certain circumstances, a term loan could be a better solution than, say, invoice discounting, or vice versa. Going with a lender that can get the job done quickly is just one aspect; other considerations include the level of flexibility the lender can extend you in terms of repayments and the cost of the finance.4. Know the funding marketWith increasingly niche funding solutions available, businesses may need an adviser they can call on for advice and market knowledge, directing them to the right type of financing for their short, medium and long term needs. 
Historically, this adviser may have been a bank manager or accountant, but a growing business should also consider a commercial finance broker, as the expansion of the Alternative Finance sector has meant more funding options than ever are open to SMEs. A good adviser will understand the market and steer you towards the right lender and the most appropriate type of funding to suit your particular circumstances.
An alternative way to search for an appropriate lender is to use the aggregators’ site. Typically they offer no advice but highlight appropriate lending products for an SME’s requirements.5. Don’t be afraid to shop aroundBeing turned down for funding by your own bank does not have to be the end of the story. There is a whole new generation of lenders in the marketplace who may be able to help you. The new lenders can move quickly and thoroughly. Make sure your lender is transparent with costs, personal in approach and takes the time to understand your business. Don’t be afraid to look around the market, possibly with the help of a reputable finance broker.Written by Credit4. Visit their homepage or call 020 3637 0570 for further information. Don’t miss the Small Business Saturday Inspire Series, ‘Accessing finance for your small business’ a free workshop on 9th February. Register here or follow @SmallBizSatUK for updates.

Finding alternative sources of finance for your small business

Thursday, December 17 at 16:04
Finance | 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 aheadMake 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 documentsWhen 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 realisticIt’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 optionsDon’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

A Pension Solution for small businesses tackling automatic enrolment

Tuesday, December 01 at 10:11
Finance | Quick Guide | Small Business | Small Business Saturday | Small Business Saturday 2015 | Top Tips

Joanne Segars, Chief Executive of The Pensions and Lifetime Savings Association, highlights how small businesses can prepare for automatic enrolment.
Automatic enrolment will require every UK employer to put certain staff into a pension scheme and contribute towards it. We know this may seem a daunting task, which is why we've launched Pension Solution. It has been designed specifically for small employers, to take the hard work out of implementing a workplace pension scheme for the first time.Planning and preparing for automatic enrolment means thinking ahead: what you need, and whose help will make it easier to complete key tasks and estimate costs. These are the key steps I’d recommend to take when getting your small business ready for automatic enrolment:
  • Find out your staging and declaration date  using your PAYE reference from The Pension Regulator’s website
  • Go through a step by step guide to setting up, get familiar with what automatic enrolment means for you and your workplace.
  • Research and select a pension provider that suits your needs
  • Communicate and explain how automatic enrolment will affect your workforce 
Pension Solution helps with each of these steps. The online service will provide the know-how and tools you need to tackle automatic enrolment confidently and successfully. We also offer access to a free half-day face to face training course for those who prefer the human touch.We’re delighted to be supporting Small Business Saturday for the first time this year because we recognise the vital role small businesses play in the UK economy.Over 67,ooo employers have already enrolled their staff into a workplace pension, with 5.5million employees now benefitting from a workplace pension and saving for retirement. 1.8 million small and micro employer workers will now join over the next three years if they earn £10,000 or more a year, increasing the amount that is being saved in workplace pensions by around £15 billion a year, according to the DWP Automatic Enrolment evaluation report 2015.Through Pension Solution we are bringing 90 years of expertise in workplace pensions to help small businesses through automatic enrolment and beyond. It is our status as an independent not-for-profit trade organisation with an impartial view that makes us different.Automatic enrolment is our best chance of getting the nation into the habit of saving for retirement, and we must focus on making the process as straightforward as possible for small businesses like you in particular.Pension Solution does just that and we warmly invite you to join our membership on Small Business Saturday so that we can help, represent and work for you.The Pensions and Lifetime Savings Association will be supporting Small Business Saturday UK on 5th December 2015 by offering a 70% discount on the normal £49 subscription to join Pension Solution as a member. Use voucher code BIZSAT1 when joining online. Follow us on Twitter: @SolutionPension

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