Financial Challenges and Solutions in Raising Funding for Business
How can you improve cash flow in your business?
Pegasus Funding Resources have written an excellent Whitepaper on the funding options available to Small and Medium Enterprises (SMEs) at the different stages of growth (Financial Challenges and Pains Faced by SMEs). Below we have summarised some of the key topics covered and added some thoughts of our own.
Fund raising successes are constantly in the news but it’s usually fast growth companies or favoured start-up sectors like tech and life sciences that get all the limelight - while the funding needs of many small and medium enterprises and how to address them remains a challenge for the business owners.
The Whitepaper rightly emphasises how important it is that management teams review their funding needs at least once a quarter, as failing to do so can result in an unforeseen squeeze on cash flow which is always painful and poses complex challenges due to a wide number of possible knock on impacts, the most dire of which is causing the business to fail. It points out that “if lending was increased to the SME sector not only would these challenges disappear but valuable jobs and growth could be created it is a win/win situation”.
It provides a useful list of the major stages of growth in a company and what funding options may be available or most suited to each stage, pointing out that you should “remember that funding seldom comes from a single source and in most cases is a mixture of different types of funding”. That's why specialist input can be really helpful and save you time in working thought the options yourself.
Types of Funding
The first type of funding they mention is the “3Fs: Friends, Family and Fools: This type of funding is normally how an entrepreneur gets started”. However it is worth highlighting that there is a subsidiary of the British Business Bank that provides unsecured Personal Loans for Business Purposes up to £25,000 per person - contact us for details.
The Whitepaper provides information on eighteen sources of funding including everything from an Overdraft to Crowdfunding to Trade Finance and Recruiting a non-executive chairman, with capital to invest.
Research and Development (R&D) tax credit as a source of funding is not mentioned, so their list is not quite exhaustive, you can read more on R&D funding here.
There is a useful analysis of which types of funding are most appropriate at each of the seven stages of a business, from Concept Stage to Failure and Phoenix.
The last section of the Whitepaper provides some simple and easy to read tables that summarise all that has been said.
About Pegasus Funding Resources
Pegasus Funding Resources is a group of specialists that we drawn on to help our clients and contacts in raising funding at any stage of growth - however small or large your need Pegasus Funding Resources can greatly enhance your chances of success. Download Pegasus Funding Resources Whitepaper
Are you ready to find out if you qualify or how much your R&D claims could be worth?