Finance for Marketing, Advertising, Research and PR: Helping you build a profitable agency
Finding funding can be a challenge for agencies. We can help you find solutions.Speak to one of our experts020 4525 5312
Setting up your business
- 'Jigsaw' funding designed around your needs
- Secured loans - £250,000 or more from 2% above base rate
- Unsecured loans up to £25,000 from 4.9%
- Asset finance - HP and leasing
- Commercial mortgages from 2% above base rate
- Lease deposit loans
- Refurbishment finance
- Secured loans from 2% above base rate
- Cashflow support
- Invoice finance
- Working capital loans
- Tax loans
Marketing, advertising and PR are essential support activities for most businesses in virtually every sector. More than 150,000 people work in the marketing and advertising industry in the UK - but to join them, you need to be able to call on a wide range of funding.
Table of Contents
There are many specialised activities within the marketing industry.
- Brand management
- Campaign metrics and research
- Database management and analysis
- Direct marketing
- Email marketing
- Market research
- Media planning
- Public relations (PR)
- Search engine marketing (SEM) and pay-per-click (PPC)
- Social media
- Web design and search engine optimisation (SEO)
Although many of these activities can be handled in-house by larger businesses, the industry is dominated by specialised agencies who provide services to clients - and the increasing need for specialised skills and knowledge means that opportunities for setting up an running an agency providing one or more of the core activities may be growing.
Established providers can expect to generate substantial income from large clients, in the form of commission, retainers and fees. Of course, the marketing sector is extremely competitive and the skills and knowledge of key individuals is the key to success. This means that individuals and partnerships which start businesses in the marketing sector can achieve remarkable success.
At Rangewell, we work with businesses in the marketing sector across the UK. We understand the challenges the industry presents, as well as the opportunities, and we can help those working within it find the find the financial solutions that they need to capitalise on their abilities.
Understanding your funding options
You may need to find the right type of funding option to allow you to:
- Set up a new marketing agency
- Acquire premises
- Acquiring equipment and assets
- Provide working capital
- Finance growth
- Deal with tax
Funding to set up a new marketing agency
The chances are if you are considering setting up your own consultancy specialising in one of the marketing sectors you will already have one or two clients, and some idea of the income you may be able to generate from them once you start up.
However, it is all too easy to underestimate the costs that are involved in setting up for yourself. You’ll need to think about how you will structure your business. With some specialisms, such as PR, you can work as a consultant as a sole trader. Others, such as advertising, which might require a range of skills from creative and media buying to account handling, might require you to assemble a small team, and thus a limited company or partnership may be a more appropriate foundation for the future. The costs involved in incorporation are minimal.
But, however you structure your business, there will be some unavoidable costs to deal with.
Marketing and Website
Securing your business’ name in domain form (.com, .co.uk. etc) may be vital. Registering a suitable name may cost only a few pounds, but if you need to buy a name that is already registered, you may need to negotiate with its registered owner. You may need to pay hundreds or even thousands of pounds to get a particularly valuable domain name. Using a variation, such as a .biz domain rather than the more familiar .com might be a more affordable alternative.
Setting up your website and promoting it through social media will be another essential investment. Unless website creation is one of your core skills, you might expect to spend £5000 to create even a simple website that is ready to present your services to other professionals.
Phone (landline and mobile) and Internet
Shop around for the cheapest package deal for your communications may be tempting, but remember that it will be your professional lifeline, and you should only consider a business grade connection with appropriate SLAs.
Computer hardware and equipment
You’ll need a quality laptop and probably a printer, scanner and copier. There will also be software you will need to get started. Buying a full graphic design suite, for example, can cost several thousand pounds, although you may be able to reduce capital costs by using Software as a Service (SaaS)
Professional Liability insurance could be an important investment, and can be a condition of contracts with some clients. If you are taking on other people, even if they are contractors, you will need Employers Liability insurance.
The total costs of all these essentials will depend on your circumstances, and what you already have in terms of equipment and software - but you should probably budget for a minimum of £5000 for your first year, even if you are a sole trader. Remember, you will need to provide an income to live on while your business finds its feet, and if you have suppliers to pay, your costs will be higher still.
Buying a marketing business
Buying an existing marketing business - whether as a partner buy-in or a complete buyout - could offer an established client list and an immediate income.
However, the costs may be substantial depending on the sector, the turnover, the potential it offers, the assets it already has and the skills of the staff who will stay within the business.
A Secured Loan could help you to borrow the large sums required for a buy-in our buyout. You might also consider ‘jigsaw’ funding. This is a bespoke finance package, made up of a number of loan types, such as a Commercial Mortgage for the premises, with another loan to cover goodwill, and Asset Finance for the equipment.
Contact us to find out more about funding for buy-ins and buyouts.
Funding for premises
If your business is more than a one-person operation, you will also need premises.
This is a major cost, but it does have some important advantages:
- It offers the space you need to work - this can be important if you provide graphics
- It can provide space to grow your business
- It allows you to take on staff
- It presents a more professional impression to clients
Even a serviced office or studio will require an upfront payment. If you want to move straight into a dedicated office suite, electricity and business rates will also have to be paid for.
Contact us to see how we can provide solutions for your premises leasing needs.
Renting may be unavoidable in the early days. However, renting restricts what you can do with your space, and means ongoing costs, and puts your practice at risk of rent increases. Buying premises with a Commercial Mortgage could actually decrease your monthly outgoings, provide your business with a valuable asset for the future, and give you more creative freedom.
Remember, if you already own your premises, a Commercial Mortgage might be a cost-effective way to raise funds to use elsewhere in your business.
Find out more about a Commercial Mortgage.
Funding your equipment
You will need the full range of conventional office equipment, but you may also require extra facilities like large format printers.
Asset Finance - Hire Purchase and Leasing - can help make virtually any type of equipment you need affordable. Asset Finance works by making the equipment or ‘asset’, the security for the loan itself. This means that if you were unable to repay, the lender could simply repossess it. This reduces the risk to the lender and consequently the cost to you.
There are several types of Asset Funding:
Hire Purchase lets you spread the cost of buying the equipment you will use for the long term. Arrangements generally last between 12 and 72 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours.
Many equipment vendors and especially those providing computing equipment offer Hire Purchase facilities to support their sales. At Rangewell, we have found that arranging your own finance can be more cost-effective.
Finance and Operating Leases
Finance and Operating Leases work like a rental agreement 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.
Contract Hire can be the most cost-effective way to provide company vehicles.
New and used assets
Pre-owned equipment can mean major savings compared with new equipment. We can help you arrange various types of Asset Finance for used equipment, allowing you to save twice - with both a reduced purchase price and secondly by spreading the cost of finance.
See how Asset Finance can cut the cost of the equipment your design business will depend on.
At Rangewell, we can help you find the most appropriate type of loan for any particular need.
There are two main types:
Secured Loans are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home or your business premises. They can be used to borrow large sums of money, of £250,000 or more.
Unsecured Loans can be suitable for smaller sums, from £5000 upwards, although some lenders will not let you borrow more than one month’s turnover with an Unsecured Loan.
We can also help with a number of specialised loan products:
Working Capital Finance
Working Capital Finance can help you stay afloat and pay staff and suppliers during the early stages of your business. It provides for the early days of your practice while cashflow is slow. It is usually designed to be repaid in the short- to medium-term, once your practice is fully on its feet.
Large-scale finance can be vital if you have major plans such as acquiring a competitor. Growth Finance can help. Lenders may require an established trading history and record of profits, but it may be possible to arrange Growth Finance based on your profit projections, rather than on your trading history.
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 that 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 you need them.
Clients, and especially large corporate clients can often take months to pay. With an Invoice Finance arrangement, you can draw down cash can bring you cash as soon as you issue an invoice, providing a flow of cash that keeps pace with the amount of business you do.
Find out more about Invoice Finance.
Tax Loans - helping deal with demands
A large quarterly VAT or annual tax demand can cause problems with your cash flow. Tax Loans help you to spread the cost of your tax demands into affordable monthly payments, meaning:
- Better control of cash flow
- Fixed monthly payments
- Quick and simple to arrange
- Avoids issues with HMRC, potential penalties and professional liabilities
Find out how a Tax Loan could help you ease tax demands.
Should you consider alternative business funding?
Crowdfunding and Venture Capital may provide alternative forms of funding, but risk high costs and the loss of control. The new generation of lenders who have a more flexible approach than traditional funding sources, and we can help you find the most appropriate funding for your needs.
How we help you capitalise your marketing business
At Rangewell, our expertise works to bring you the financial solutions you need to capitalise your business, whether you want to fund capital expenses, working capital or growth.
We know the lenders who can offer the most competitive rates for the design sector. Whether you have a straightforward finance need, or require a complicated ‘Jigsaw’ funding plan made up of a combination of products, we can work with you to find the answers that are right for you.
Call us now to get our experts working for you and the future of your marketing business.
REAL EXAMPLES OF WHAT WE CAN DO
Help arrange funding to help an established fashion professional launch a brand
Fund the setup of a new practice for an interior designer
Find the most competitive loan to let a graphic designer acquire partnership in a long established firm
Help a find finance for a London design practice to buy an independent studio
Source a commercial mortgage to allow a small practice to buy the freehold of its studio
Last update: 4 April 2021
Download Rangewell’s free and detailed guide to finance for your marketing, PR or research agency
What funding options are available for your sector - marketing communications, brand managers, social media or public relations
Why not all lenders are equal and why it is important to find the one that is right for your agency
Are there downsides to finance and how can I avoid them?
A guide on how to arrange finance, including the paperwork you are likely to need to supply
The key finance terms explained