Telecommunication Business Finance & Funding

The telecommunications industry is absolutely paramount to the global business community. In recent years, businesses have been able to harness the power of technology, connecting them to people all over the world at just the click of a button. 

As telecoms business owner, you are a core part of this bustling sector - and there's so much potential for you to grow within it. 

The convergence of voice-based telecoms with data communications is all but complete. Many telecommunications companies started with selling handsets and landlines in the late 90s and early 2000s. Now, with rise of VoIP (Voice Over Internet Protocol) technology, these businesses have become experts in telecommunications across the board. Everything from smartphones and hardware through to WiFi and networking, it all falls under the remit of a growing telecommunications business.

If you provide any of these services, or you are thinking of starting a telecommunications venture, then you will need the financial backing to pay for staffing, equipment, rent and other costs.

At Rangewell, we can help you find telecoms finance to support whatever challenges your business is facing. Keep reading to learn more about the different types of telecommunications business finance, or get in touch with the team to start your finance application today.

Finance solutions for telecommunications businesses

There are several reasons why a telecommunications company might apply for business finance. From buying equipment through to investing in new service areas, the right funding packages will support you to achieve your goals. So, let's take a closer look at what telecom finance can help you do...

• Set up a new business
• Fund business development with mezzanine funding
• Acquire equipment and assets,  including intangible assets
• Provide working capital
• Finance growth
• Obtain cash advances with invoice finance and Merchant Cash Advances
• Acquire or redevelop premises

and much, much more. 

Starting a telecommunications business

If you are ready to set up your own telecoms business, remember that you will need funding for operating expenses, marketing, equipment, and premises.

So, once you have a business plan, and perhaps existing relationships within the industry, it may be possible to leverage your knowledge and contacts to start up a business. Providing telecoms services to other businesses as part of the channel, or a value-added reseller could both provide attractive business models, especially if you can count on the support of a major manufacturer.

As a fledgeling business, you might find it difficult to obtain funding for startups from the typical lenders. Even if you can access business loans from the high street banks, then you may not be offered the best terms or the right amount of funding you need to achieve your goals.

For this reason, it's important to speak to an expert to ensure you are getting the best deal. At Rangewell, we have a team financial advisors who are by your side through every step of the finance process. From putting together the best possible application, through to scouring the whole of market, and securing the best possible telecoms finance package for your circumstances. 

Secured loans

Even if you are buying into an existing business as a partner and have a strong background in the industry, it helps to work with a broker to ensure you have access to all of your potential funding options. 

Start-up funding usually takes the form of a secured loan, with the security provided by an asset such as your home. However, smaller sums may be available with an unsecured lending arrangement. A secured loan like this could help you to borrow the large sums required for a buy-in or buyout.

Asset finance

The growth of the telecommunications industry has meant that there is now a lot of hardware on the market. The power of WiFi might help business owners to stay connected on the move, but without the right equipment backing them up, they risk losing connection. 

So, as a telecoms company, you will need cutting-edge technology, such as smartphones handsets, cabling and possibly even modems and servers, depending on which services you offer. All of these can be expensive to buy or rent, so asset finance will help you to spread this cost over monthly payments. 

Jigsaw funding

If you find you require multiple different types of finance, such as asset finance and a bridging loan, then you should consider jigsaw funding.

As the name suggests, this is a bespoke finance package made up of a number of loans, providing you the most appropriate funding for your overall business goals. 

Growing your telecoms business with Mezzanine Finance

As your business grows, you will start to see new opportunities and potential for growth. To fund these ventures, such as acquiring a competitor or launching a new service offering, you'll need significant financial investment to make sure you succeed. 

Equity funding could provide the scale of funding you need. There’s nothing to repay because you are selling a share in your business. However, it can mean losing control of your company, as you will need to share all future profits with your investors. Equity investors make their return from your growth.

Another option could be mezzanine finance, which provides a flexible way to raise capital without having to give up a full equity stake in the business. Mezzanine debt is a type of hybrid equity and debt financing which acts as a long-term solution for telecom companies.

A lender will provide the funds, secured on the future of your business. They will be able to offer a relatively high level of funding, but you will need to repay their debt and interest charges - if you fail to repay, they will have the right to take an agreed proportion of equity interest in the company.

Want to know more about which funding option will work for your telecommunications business? Get in touch with Rangewell today. 

Hire purchase and leasing equipment

Alongside asset finance, which we mentioned above, Hire Purchase and Leasing are other options that could help you gain access to the equipment you need, but can't afford to buy outright. 

There are a couple of different types of asset rental:

Hire Purchase

Hire Purchase (HP) lets you spread the cost of buying the equipment you need, with arrangements generally last between 6 and 60 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours.

Equipment suppliers will frequently offer HP deals to help them secure a sale. These may seem attractive - but can include hidden costs which push up the real price you pay.

At Rangewell, we can often help set up HP agreements that undercut those of equipment suppliers, or which let you take advantage of the lower costs of pre-owned equipment.

Leases

Finance and Operating leases work like rental agreements and let you spread the cost of equipment with no upfront payment. This type of finance could be the best option for equipment which will have a limited life. You can simply return it to the finance house at the end of the lease, leaving you free to update to the latest technology. This may be particularly relevant to the telecoms sector, where the pace of technological change is rapid.

Software and SaaS can also funded with lease arrangements, so speak to the experts about how you can access this support. 

Intangible Assets

Intangible assets are non-physical assets. They don’t have a physical form – but they still have huge value. Assets like patents, copyrights, licenses, trademarks and goodwill are all classed as intangibles. Acquiring patents, copyrights and trademarks can be a key to building your business.

Intangible assets can also be financed, although fewer lenders provide this service. One of the reasons why is that it is tough to determine an accurate valuation of an intangible asset. Arriving at a fair valuation for an intangible asset will, therefore, require specialist skills. A detailed valuation report will need to be prepared by independent experts in areas such as marketing or patent law depending on the nature of the asset.

Intangible Asset lenders will be able to work with you to provide this report and an assessment of the value of the asset to you and your business. At Rangewell we can help find lenders who can provide funding for Intangible Assets.

Supporting your cash flow

Whether your business is brand new, or it's been established for decades, you will likely face some of the same issues surrounding cash flow. You may need to provide a steady cash flow for the initial period when concentrating on bringing in business. Working Capital Finance and a Revolving Credit Facility can both be useful in providing the additional funds you need.

Working Capital Finance

Working Capital Finance can help you stay afloat and pay staff and suppliers during the early stages of your business. It is designed to provide the operating expenses, from staff costs to supplier bills, while cash flow is slow. It is a loan usually intended to be repaid in the short- to medium-term, once your telecoms business is fully on its feet.

Revolving Credit Facilities

Overdrafts are a well-known form of business finance, but banks may be reluctant to provide them. Revolving Credit Facilities can be an alternative, providing a line of credit, with an agreed limit you can call on when you need it. You only pay for the money you take out, so it can be a cost-effective way to raise funds if needed.

Cash Advances

There are various revenue models that your telecoms business might adopt, depending on whether you are dealing with the public or with corporate customers:

Invoice Finance

If your income stream is based around corporate sources, you may find that there are restrictions on your cash flow as a result of late payments. An Invoice Finance arrangement can bring you a cash advance as soon as you issue an invoice, providing a flow of revenue that keeps pace with the amount of business you do.

Find out more about Invoice Finance, or get in touch with us to apply today. 

Merchant Cash Advances

If you deal with the public on a retail basis, you will probably receive card payments.

Merchant Cash Advances are an arrangement which will allow you to secure a cash advance based on the level of payments you take. Repayment is made automatically as a percentage of every card transaction you take.

Funding for premises

Your telecoms business will need premises. An office will be essential, and you may need sales and technical space. You may need a location that is convenient for retail customers, with good parking and good transport links.

While it may be possible to start up a business-to-business service in a shared space, you will probably want to lease your own premises. You will need to find an initial downpayment, and you will also have additional costs, including power and business rates to budget for.

We can provide solutions for your premises leasing needs. 

Renting may be unavoidable in the early days of your business. However, renting premises restricts what you can do with your space, and means ongoing costs. Buying premises with a Commercial Mortgage could be a sound investment, as it could allow you to plan your facilities without compromise.

Finance your telecommunications company with Rangewell

At Rangewell, we work with a wide variety of telecom businesses like yours. We understand the sector and the potential it offers, as well as the challenges it presents.

We can use our expertise to help you find the financial solutions you need to capitalise your business, whether you want to fund capital expenses, working capital or growth.

As well as conventional finance products, we can help you find Alternative Funding, using new loan providers and styles of funding. We know the lenders who can offer the most competitive rates for the sector. Whether you have a straightforward need or require a ‘Jigsaw’ funding made up of a combination of products, we can work with you to find the answers that are right for your business plans.

Call us now to get our experts working for you and the future of your business.