In the current climate, getting small business loans is not easy and as a result Britain’s alternative finance market has grown from £267 million to £1.74 billion in just two years and could reach £4.4 billion in 2015. In a study funded by Nesta and the University of Cambridge, 86% of business owners who have used alternative finance would approach alternative funders first in future, even if offered similar terms by a bank.
But many are still confused on the options available and which option is the best fit for their business circumstances. In the following infographic we look at each of the options, when they are best utilised and what they can be used for.
An Angel investor provides financial backing for small start-ups or entrepreneurs. Angel investors are usually found among an entrepreneur’s family and friends. The capital they provide can be a one-time injection of seed money or ongoing support through difficult times.
Angel investment could help when you:
Angel investors tend to be somewhat risk-averse, and will rarely make “follow-up” investments. You might find yourself wrestling with your financier over key company decisions and have less control over your company’s future.
Crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people who believe in your offering, typically via the internet.
Crowdfunding could help when you:
Often more funding is required as crowdfunding is provided in smaller amounts than a comparative Angel Investor, from a number of investors.
A business loan is when you are leant a certain sum of money over a period of months or years. The interest rate and monthly payments are fixed over the term.
A quick business loan could help when you need:
Cashsolv provide business loans between £20,000 and £250,000 with straightforward fixed rates and flexible loan terms between 1-12 months. Cashsolv lend our own money so we can make a quick decision and have the funds in your bank within 24 hours of applying via our online form.
Peer to peer is a form of funding when a number of ‘investors group together to lend you the money you need at an agreed interest rate. Usually this is arranged and put together through an online platform’.
Peer to peer lending could help when you:
If you are suffering cash flow problems peer to peer lending may incur higher interest rates.
Asset-based lending is a business loan that is secured by collateral (assets). If the loan is not repaid they the asset can be taken.
Asset-based lending could help when you:
Cashsolv provide new funding in situations where you are struggling to gain business finance from your bank. Our reputable lenders take a different view on longer-term asset-based finance and look past short term cash flow problems and consider overall business viability when lending.
Invoice finance is a form of short-term borrowing to improve working capital and cash flow position. It allows a business to draw money against its sales invoices before the customer has actually paid.
Invoice finance could help when you need:
Cashsolv can help arrange invoice finance where you can borrow up to 85% of your invoice value immediately, releasing the cash that you are awaiting to aid your every-day working capital.