With growth high on the agenda for many UK small businesses, knowing where and how to secure funding is important. Rob Straathof, pictured above, CEO at small business finance provider Liberis, shares some top tips which will help SMEs actually secure investment.
For example, research from alternative finance provider Liberis revealed that over 60% of UK SMEs said they require funding to grow, but 57% don’t know how to source and secure that all important finance. For even the most seasoned entrepreneur, finding the right, relevant option takes a lot of work.
There may be a number of financing options available, but actually securing investment is not always that easy. Knowing where to find and secure the right financing can sometimes be overwhelming.
Here are some top tips on how to secure funding for your business’ investment.
Know and Strengthen Your Position
Before you begin your journey to sourcing funding, take stock of your business’ position and your existing cashflow. Constantly revisit your budget so you can ensure you’re working with accurate figures.
It’s important to be authentic and clear, so make sure, you have all the relevant credentials in place. You can record all of your current income, expenses, overheads in a profit and loss statement – this will help you plan ahead.
Investors look to support the most innovative businesses so it’s important to get noticed. Have a look at what small business events and networking opportunities are taking place near you and take advantage of them.
Use social media channels to build your network and help establish your brand. Look at similar companies online and what they’re talking about, who they’re engaging with and what events they also might be attending.
Use your time wisely – you don’t need to go to every event you’re invited to, do your research and be strategic.
Your Credit Score
Funding providers will use a credit bureau to look at your credit score when applying for business finance.
Be aware of factors that can affect your credit score such as your track record for making payments ; any previous funding applications; and any financial connections you have to other people, which may include a business partner.
Be aware of what you can do to improve your credit score is also valuable. Make sure you cancel any unused cards and keep a close eye on your business and personal records.
Get involved with your business community, whether it be local or industry based, and share your knowledge. Ask for as much advice as possible and learn from others’ experience: which providers worked for them and which didn’t; what key questions should you be asking your suppliers; and who caters best for your business type. This insight will be key when reaching out for funding.
Closing the Deal
Closing the deal is possibly one of the most difficult s parts when acquiring funding. Whether sourcing a bank loan, crowdfunding or investment from an angel, be prepared to make a pitch. Write a script, rehearse and ensure you have answers to any difficult questions that may crop up.
Be authentic, genuine and compelling – harnessing all the passion you had for starting your business on day one! Funding providers will want to understand not only the position of your business and how you’ll use the money, but also what your key challenges and current opportunities are too.
There is no “one size fits all” solution when it comes to small business finance. Do what is right for your business at the time. If you seek guidance from your peers and research your options fully, you will be on the way to achieving your goals and reaching your business’ full potential.
Rob Straathof is CEO at alternative finance provider Liberis