Raising the Money for a Business OpportunityRaising the Money for a Business OpportunityThere does not seem to be a shortage of money to finance the launching of new businesses and the growth of existing ones.
What are scarce, are good, small company propositions. At least, that is the argument put forward by financial institutions themselves. There is certainly an element of truth in this view, but the quality of the propositions owes much to the poor groundwork and planning of some budding entrepreneurs.
The starting point for any search for funds is to determine how much is needed, and then to demonstrate the security that the likely investor will then enjoy.
The accepted way in which proposals for funds are put forward is through a business plan. The Business Plan brings together the marketing and operational aspect of the business or proposed business, and expresses these actions in terms that a financial institution will understand. Not surprisingly, these institutions will expect the plan to contain financial statements both actual and projected.
As well as being a possible source of money, tha banks, through their national network of branch managers, can help with the preparation and evaluation of business plans. They see hundreds of new business proposals each year and are amine of local knowledge. If you want advice on your business plan, and they are usually only too pleased to help, you need some facts to hand first.
The terms of a loan from a bank depends on the following criteria:
Contact the banks direct to find out what loan would be most suitable for your needs.
Barclays Lloyds TSB HSBC NatWest Royal Bank of Scotland
What is venture capital
Venture capitalists typically put money into small, fast-growing companies who cannot raise funds on the stock market. They can invest in companies at any stage of the business cycle. In return for this medium or long-term financing - usually for five or seven years - the investors receive a share of the company's equity. The venture backer may also seek a non-executive board position and attend monthly Board meetings. They provide far more than a cheque, stepping in with experience, contacts and advice when required. Some well known UK companies have been built with venture capital, for example Brands Hatch Leisure, Lastminute.com and the National Express Group.
Basic things to know
Key Facts
The Department of Trade and Industry run a Small Firms Loan Guarantee Scheme for businesses fulfilling certain criteria. This service may help with the purchase of an established business or franchise resale. Click here
It is pointless approaching a venture capitalist with a £20,000 start up if they are only allowed to do £20million buy-outs. The British Venture Capital Association Directory lists all Venture Capitalists in the UK and indicates their interests.
British Venture Capital Association
Telephone 020 7240 3846 or click here
Venture Capital Report
Click here
Advice can also come from intermediaries, particularly accountants. For example:
PricewaterhouseCoopers
Click here
Enterprise Advisory Service International provides information to both start-up firms and established companies regarding government assistance schemes, venture capital, and trade and tendering opportunities. They also offer access to support at national, regional and county level in the UK, Ireland, and USA.
Click here
