Finding Funding

1
Finding Funding

• Robert Fiske, Business Adviser
• Business Link for Suffolk
• robert.fiske_at_bls.org.uk

2
Seminar Overview

• 1. The Need for Funding
• Whats it for? How much? etc.
• 2. Sources of Funding
• What types are there? Pros cons?
• 3. Accessing Funding
• Where to go? What to do?
• 4. Questions

3
The Need for Funding

• All businesses require funding (fact!)
• Often most important at start-up
• To finance eg. set-up costs (eg. premises,
  capital equipment etc.), RD, stock, staffing,
  early stage cashflow etc.
• To finance growth (eg. marketing, RD, capex,
  acquisitions, cashflow)
• Important to understand difference betweenPL
  and cashflow

4
Profit Loss Account
5
Cashflow
6
PL vs Cashflow
7
Sources of Funding

• Grants
• Local authorities
• Princes Trust
• Area based
• Sector based
• Technology based
• Family friends
• Banks
• Loans
• Overdrafts

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Sources of Funding

• Banks Loans Overdrafts
• Bank loans these have the benefit of normally
  being for a fixed term with a repayment schedule
  to clear the debt
• Small Firms Loan Guarantee Scheme as above, but
  75 guaranteed by DTI (specific conditions apply)
• Overdrafts these should be used to support cash
  swings in working capital and should move from
  overdraft to credit balance on a frequent basis
• Remember banks are commercial lenders not risk
  lenders

9
Sources of Funding

• Grants
• Local authorities
• Princes Trust
• Area based
• Sector based
• Technology based
• Family friends
• Banks
• Loans
• Overdrafts
• CDFIs

• Sales finance
• Factoring
• Invoice discounting

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Sources of Funding

• Sales Finance
• Factoring makes available a percentage of sales
  invoices as soon as issued Factoring company
  provides credit control service
• Invoice Discounting - makes available a
  percentage of sales invoices as soon as issued
  credit control retained by business

11
Sources of Funding

• Grants
• Local authorities
• Princes Trust
• Area based
• Sector based
• Technology based
• Family friends
• Banks
• Loans
• Overdrafts
• CDFIs

• Sales finance
• Factoring
• Invoice discounting
• Asset finance
• Hire purchase
• Lease purchase
• Operating leases

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Sources of Funding

• Asset Finance
• Invaluable source of finance for asset purchases
  vehicles, equipment etc
• Hire purchase where you hire the asset then
  purchase it
• Lease purchase where you lease the asset then
  purchase it
• Operating leases no beneficial ownership of the
  asset

13
Sources of Funding

• Grants
• Local authorities
• Princes Trust
• Area based
• Sector based
• Technology based
• Family friends
• Banks
• Loans
• Overdrafts
• CDFIs

• Sales finance
• Factoring
• Invoice discounting
• Asset finance
• Hire purchase
• Lease purchase
• Operating leases
• Business angels
• Venture capital

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Sources of Funding

• Business Angels
• Private individuals who invest in your business
  and hopefully bring additional strength to
  management team
• Investment normally made into Limited Company
• Venture Capitalists
• Investing into Limited Companies with high growth
  potential and helping to maximise exit route

15
Accessing Funding

• Be clear how much you need
• Must produce financial forecasts (need a business
  plan)
• These must be credible to you and
  lenders/investors
• Seek sources and compare
• Always investigate grants and interest free loans
  (but dont try to make unreasonable fits)
• What is your personal commitment? (Cant expect
  others to pitch in if you wont)
• Seek advice - talk to advisers and trusted
  sources
• Talk to your bank (but remember, they hate
  surprises so keep them informed!)

16
Accessing Funding

• Some useful resources
• Grants via Business Link www.businesslink.gov.
  uk
• Grant for RD via EEDA - www.eeda.org.uk
• Princes Trust - www.princes-trust.org.uk
• SFLGS via Business Link www.businesslink.gov.u
  k
• Foundation East - www.foundationeast.org
• BVCA - www.bvca.co.uk

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Business Link for Suffolk

• Tel [phone]
• info_at_bls.org.uk
• www.bls.org.uk