If your small business is in urgent need of capital but your bank is reluctant to provide a loan, there’s no need to despair just yet. Plenty of small businesses have found themselves in such a position, but there are several other alternative funding for your small business aside from traditional bank loans when it comes to securing funding for your growing business.
Crowdfunding
A crowdfunding campaign could help you collect financing from people who believe in (or hope to be involved with) your organisation, and want to see you succeed. If your business is small or new enough not to be listed with stock markets, equity crowdfunding may be a viable option for you. Equity crowdfunding allows individuals to invest in exchange for shares in your company. With specialist platforms like Crowdcube, almost anyone can become an investor and share in the future of your business.
If your SME doesn’t fit the bill for equity crowdfunding, you could explore traditional crowdfunding platforms like Kickstarter, where participants will donate in exchange for small rewards. While it can be harder to secure large sums of money, you won’t have to pay anything back, and donors generally back projects they’re passionate about, so word-of-mouth can be quite a useful promotional tool.
Government Grants
There is a variety of support available from the UK Government for start-ups and small to medium businesses. For example, if you’re the owner of a pre-revenue start-up, you can apply for an unsecured personal loan of up to £25,000.
The Government launches new grants for small businesses all the time, so it’s worth keeping on top of their listings to ensure that you apply early for any schemes you could be eligible for. At the moment, established SMEs may also find some relief in the Government’s initiative to help businesses recover from the effects of coronavirus.
Bridging Finance
Bridging finance could be a smart option for businesses in need of short-term funding. The practice involves taking a short-term mortgage against any property to release capital which can then be used, as the name suggests, to bridge the gap between urgent financial needs and future funds becoming available.
While it’s an effective solution to a number of funding issues, bridging finance can be tricky. It’s still a fairly new landscape and there are no comparison sites to help you see what’s available, so it’s important to have expert help when it comes to navigating the market. Enness for instance are leading brokers in the industry, with invaluable experience of bridging finance in both personal and commercial capacities, across the UK and beyond. If you have a property at your disposal and an urgent need for capital, you can get started by visiting ennesglobal.com.
As daunting as it is to be rejected for a loan, your bank’s refusal doesn’t have to spell danger for your SME. Whether through campaigning to passionate individuals or leveraging your assets to provide short-term relief, there are plenty of alternative funding options available to support your small business as it continues to grow and thrive.