Questions to ask when thinking about Small Business FinancePublished on 28th March 2018 2018-03-28T12:28:43+00:00 - Last update on 16th October 2018 2018-10-16T14:14:35+00:00
As enjoyable as running your own SME business can be, it’s also a tough and demanding responsibility. At such an early stage in development, your primary focus will no doubt involve growing your business and reaching out to potential customers. However, finding the necessary funds to achieve your ambitions can prove difficult, especially if you don’t know where to turn. That’s why more and more SME owners are seeking the aid and support that could be acquired through Small Business Finance. Small Business Finance covers a wide range of business finance solutions, granting you the ability to press ahead with all manner of projects that’ll allow you to go from strength to strength. So if you’re thinking about applying for Small Business Finance, here are just some the questions you need to consider:
- Why does your business need funding?
- How much money does your business require?
- What is my business’ current financial situation?
- What repayment plans are available?
- Are there any additional costs or fees?
What aspect of your business requires external funding?
When starting your journey toward an appropriate Small Business Finance solution, you must be sure why your business needs to borrow external funds in the first place. Whilst there are products that could support your operating costs or provide a cash injection, there are plenty of other solutions available which can be used to borrow and purchase equipment, acquire real estate, redevelop property or even expand your fleet. Therefore, with so much potential on offer, identifying which aspect of your business you wish to support or improve will be your first step towards sourcing an appropriate solution.
How much money does your business need?
Before applying for Small Business Finance, you must be aware of how money you need to support your finances or complete the project in mind. This is essential since each product under Small Business Finance work in its own unique way to generate a lump sum or advance for your business. So whilst some finances solutions offer up to a set amount, there are other products available that possess no set credit limits, with lenders preferring instead to assess factors such as past income, equity, purchase price or even how much value a concerned project is predicted to add. Therefore, in order to gain the funds that your business requires, you must approach the appropriate lender with a realistic number in mind.
What solutions are right for your business’ current financial situation?
Because Small Business Finance works with a diverse selection of business finance solutions that all have their own lending criteria, it is able to provide funds for a variety of financial situations. Some products may require you to present security in the form of business assets or receivables, whilst other solutions may not require such a commitment. Or, instead of focusing solely on your creditworthiness, some products may assess your business’ past income, customer orders or balance sheet. As such, even if your business possesses a weak credit score, you could still receive the support that you require. However, your options will be limited as a result. Therefore, you need to check eligibility and be upfront with lenders in order to increase your chances of sourcing a suitable business finance solution.
What repayment schemes are available with Small Business Finance?
Small Business Finance is designed to either spread out or defer the cost involved in achieving your goals. Depending on which business finance solution you’ve chosen, there are a number of different payment method available. Although fixed monthly repayment schemes are the most common, there are also flexible monthly repayments and deferred payments. Therefore, before making your mind up, make sure that you understand the repayment scheme and whether your business can afford it.
Are there any additional costs that I should be aware of?
As well as the rate of interest, you need to make sure that you’re fully aware of what additional charges may be applied with certain products and lenders in order to determine the total cost of the agreement. These costs can range from arrangement fees, legal costs, administration, late payment and redemption penalties to exit fees. Therefore, in order to know where your business stands, review all documents carefully and request that the lender explains all their charges to you in a face-to-face meeting. With all of the information in front of you, you’ll be in a stronger position to compare products and may even get some of these costs reduced or amended during negotiations.
Looking for Small Business Finance?
In order for your business to achieve a sustainable future, being able to support your finances and maintain a constant rate of growth is essential. However, as an SME business, that may be easier said than done. The issue that might be holding you back could be a lack of funds. Although it may be tempting, dipping into your own cash reserves can a risky strategy which can cause issues later on in your business’ development. It’s also an unnecessary move to make, especially with the availability of Small Business Finance, which can be used for a wide range of purposes. So if you’ve got a business project that needs funding or your finances could do with some extra support, apply for Small Business Finance today, or find out more with Rangewell.
Share this article
Discover your range of finance. Every type of finance for every type of business.
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.Find Funding