"Having interviewed another adviser, Dominic’s approach was much more appealing, and the directors bought into his enthusiasm and energy."
JB PRS Guitars Europe
Raising Funds for Business Growth
Dom Marley Director - Head of Wealth Management
You’ve got big plans for the future, but to get there you need additional funding.
So where does that additional funding for business growth come from exactly?
Broadly speaking, you can either borrow money, which you’ll repay later, or raise investment in your company. Investment usually involves selling part of the ownership of your business.
The most appropriate route to raising finance will depend on…
- Where your business is in the ‘business lifecycle’. Are you a ‘start-up’, ‘early stage’ or ‘established and growing’?
- The size and profitability of your business
- Whether you have any ‘collateral’ or ‘security’ to support your request
- The quality and credibility of your business plan
- How much control you are prepared to give up
- And of course, how much money you need
What’s the best funding route for business owners?
The amount of funding offered, and the terms and conditions, are important factors to consider when considering funding for your business. Does the amount meet the requirements of your strategic plan, and will the terms and conditions prove restrictive or onerous?
YOUR BORROWING OPTIONS
1. Borrow from the bank
If you can prove you’re able to repay, can provide security and have a good credit rating, it should be straightforward to secure a bank loan. What’s not so straightforward is pulling together a solid business plan with all the necessary figures and forecasts, as well as a clear strategy on how you’ll use the small business loan, and how it’ll be repaid.
2. Borrow from other lenders
These would include specialist property lenders who’d help you to acquire business property, bespoke funders of fixed assets used in your business (such as cars, vans and equipment), and lenders focused on working capital provision, such as Invoice Discounters or Factoring Companies. Finding access to the best one of these can be a minefield, and Fortus can help you navigate the pathway.
3. Peer-to-peer (P2P) funding
Similar to repaying a bank loan, P2P funding is for smaller businesses and can be applied for online with a loan being drawn from savers looking for a better return on their money. Think of it as lender-borrower matchmaking.
YOUR INVESTOR OPTIONS
1. Venture Capital (VC)
VC is typically provided to early-stage companies with high growth potential, or those that’ve grown quickly and are ready to expand. These investors are taking a higher risk due to the stage of the business, and so will often seek a controlling interest in the company. However, they absolutely share the desire of the owners to succeed, and can help enormously with the corporate governance, and eventual exit from the business.
2. Angel investors
Wealthy individuals, or groups of the same, often seek investment opportunities in start-up or early-stage businesses. There are tax incentives for them to invest, and so they may often be less ‘hands on’ than a VC, although the principal is the same. This is more of a ‘Dragons Den’ approach, and Fortus can help you find these investors.
3. Private Equity (PE)
PE is typically for more established businesses and can be used to support business growth (Growth Equity) including acquisitions, as well as supporting change of ownership with situations like a Management Buyout (MBO).
TALK THROUGH YOUR OPTIONS
With so many options available, having a professional financial advisor to act as your sounding board can give you the much-needed reassurance that your decision is the right one.
Fortus has been a sounding board for many ambitious business founders and owners as they seek the best business growth funding solutions.
We’re well connected too.
Over the years, our team’s built up an impressive network to link you up with the right lenders or investors for your business and optimise your fundraising strategy. Fortus has access to over 150 lenders, and the whole of the commercial investment market.
Dom Marley Director - Head of Wealth Management
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