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5 reasons to grow your business with VC Funding Alternatives

Published on 12th August 2019

Are you eager to take to charge over your career? Although starting your own business can be an exciting next step with a huge amount of potential, it can also have its fair share of frustration and unique challenges. And one of the biggest obstacles standing in the way of a new business is the matter of funding - the lifeblood of any successful venture.

In order to overcome this issue, some aspiring entrepreneurs decide to look at the Venture Capital option. Although venture capital can be a useful way of getting the ball moving, it also often means giving away equity, and possibly losing some control over, your business. However, if you’d rather avoid this then you may want to consider applying for a VC Funding Alternative instead. So, if you’re looking for suitable alternative to venture capital, here are just some of the benefits that applying for a VC Funding Alternative has to offer, including:  

  • No loss of control
  • Access to a wide range of business finance solutions
  • Access to a lump sum
  • Suitable for a variety of purposes
  • Flexible criteria

Will I remain in control of my business?

Yes. If you choose to apply for a VC Funding Alternative, you could receive the funds that you require to achieve your goals without surrendering shares in your business or having to answer to any 3rd party investors. That’s because, with this form of funding, lenders only seek to earn on a return on their investment by charging your business interest. Therefore, once the agreement matures and has been fully repaid, your business’ involvement with the concerned lender comes to an end. However, if you’ve managed to foster a strong relationship with that particular lender during that time, you could take advantage of this in order to gain favourable finance agreements with them in the future.

Want to grow and expand your business? Thought about applying for Venture Capital, but don’t want to lose shares in your business? Apply for a VC Funding Alternative or learn more about how your business could benefit

What VC Funding Alternatives are available?

VC Funding Alternatives include a wide range of business finance products that all function in different ways to provide your business with the support it needs to grow, operate and succeed. As such, If you want to remain in control of which direction your business is heading in, you could apply for anything from Secured and Unsecured Business Loans, Mezzanine Finance, Commercial Mortgages, Merchant Cash Advance, Asset Finance to Invoice Finance. However, with so many products to choose from, taking the time to understand all of them before submitting an application would be a wise move - doing so could save your business money in the long-run, whilst also preventing you from wasting valuable time with an inappropriate product and receiving a rejection as a result.

How much money can I borrow?

This depends on your chosen product. Whilst some, such as Business Loans, impose a set borrowing limit, others don't, meaning that there’s no limit to how much money your business could borrow other than what each lender is willing, or able, to lend. However, before submitting an application, you need to consider how much money you need to achieve your goals. Although it may be tempting to request a large lump sum, borrowing more than what you need would lead to your business paying more in interest over the course of the agreement.

What can VC Funding Alternatives be used for?

VC Funding Alternatives can be used for a wide variety of purposes. Although some products may only be used for specific purposes, there are many other solutions available that impose little or no usage restrictions. Therefore, applying for a VC Funding Alternative could enable you to acquire new equipment, smooth out uneven cashflow, receive a cash injection, carry out refurbishment, purchase property, release equity, cover unexpected expenses or even gain additional support during emergencies. So, no matter what your business needs to succeed and move forward, applying a VC Funding Alternative could provide you with the support you need to do so in total confidence.  

How do I qualify for a VC Funding Alternative?

Because VC Funding Alternatives covers a wide range of business finance solutions, you need to take into account that the criteria for each product can vary significantly. Although criteria requirements should be specified in the documents provided by the lenders, the 3 key areas you need to consider are Collateral, Personal and Business Credit Profile and Documentation.

  • Collateral: When applying for a VC Funding Alternative, you need to decide whether you want to use a secured or unsecured business finance solution. Although secured products usually carry lower interest rates (compared to unsecured solutions), this also means offering collateral in the form of unencumbered assets (equipment, machinery, vehicles or property). This means that if your business defaults on the agreement, the lender will repossess and remove them from your premises. Meanwhile, unsecured finance products do not require you to provide collateral but can be more challenging to qualify for due to the increased risk to the lender.
  • Credit Profile: Although it won’t always be used to against you, lenders will usually request permission to review both your personal and business credit profiles. This provides lenders with an in-depth understanding of the potential risk involved in lending to your business and how well it's performing financially, helping them to decide how much interest they should charge. When assessing your credit profile, lenders will incorporate into their search whether you have: past or outstanding CCJs, Accelerated Payment Notices, arrears, existing unpaid debt and your history of resolving debt on time. So although possessing an adverse credit score may not always be used against you, it is likely to affect how much interest you’re charged throughout the agreement.
  • Documentation: When applying for any VC Funding Alternative, you’ll be asked to provide lenders with a variety of vital documents, depending on your chosen product. As well as providing proof of your identity, you may need to submit anything from your recent/past bank statements, sales reports, Profit & Loss statements, collateral documentation, and unpaid invoices to your sector’s Standard Industrial Classification (SIC) code. This enables lenders to gain a greater understanding of how you operate and decide how much capital they will lend to your business.

However, these aren’t the only factors that can affect your application. So, in order to maximise your chances of getting approved for a VC Funding Alternative, speaking with a qualified business finance professional could prove invaluable.

Could a VC Funding Alternative provide you with the support your business needs to succeed?

Whilst forming a comprehensive business plan and surrounding yourself with a competent team is important, you also need to ensure that you have access to the funding your business requires. However, at such an early stage in your development, obtaining these funds can be frustrating. Yet without them, achieving strong growth, running day-to-day operations and delivering your goods and services would prove challenging. Although Venture Capital can be useful for some start-ups, it’s highly sought after and requires you to hand over shares in your business. Fortunately, there is another way that you provide your business with the funds it needs to succeed and achieve a sustainable future. So if you want to drive your business to next level, but need help raising the necessary capital to do, apply for a VC Funding Alternative today or find out more with Rangewell.

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David Harrison

David Harrison

Content writer
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