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The majority of businesses require external funding to help them set up establish and grow. There are many sources of funding available - overdrafts, term loans, trade-financing, asset-based financing, invoice discounting and equity finance. Most are designed to meet specific needs and the choice will vary further according to the type of business, the stage of its development and its structure.
Because of the wide range of funds available, making the correct choices can be difficult. In the past, many owner-managers tended to opt for what they were comfortable with, placing an over-reliance on internal funds or bank overdrafts for their investment needs.
However, in recent years business owners have become much more aware of the different sources of funding available to them and in many cases opt to 'pick'n'mix' their sources according to their specific needs.
During the early years of your business existence you are likely to require a number of 'rounds' of funding. In each case the source will depend on the use to which the money is to be put; the degree to which the future success of the business is assured; business assets or personal assets available to offer as security; and the extent to which trading track-record can be demonstrated. Certain sources of funding will also carry tax implications which will have to be considered.
Grant Thornton can help you throughout the funding process, creating a package, sorting out the key issues a financier would want to raise and recommending the best source for the job in hand.
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