UK Debt finance – financing business growth
Article by Ed Pearson, Debt Dr
There are so many questions from SME businesses that are looking for debt finance of some sort or another. Valuable time is wasted by SME stakeholders trying to source the right deal from the right people at the right price for the right reason. It can be a minefield which may not be as desperate as leading to a company downfall but lack of funds not available within a reasonable timeframe can spell the beginning of missed opportunities, months of struggle and eventually an insolvency disaster waiting to happen.
What is the finance for?
Be clear on what you want your finance for. If you are looking at:
* Working capital* Expansion – skills, diversification or perhaps acquisition* Development of ideas * For use in the actual product or service * Proving the market* Proving the product
Or something else in this vein then go for it.
If you are looking for funds to:
* Cover losses * Repay your debts * Paying your salary
Then generally speaking, forget it!
Have you seen Dragon’s Den on BBC2? What happens when the entrepreneur divulges the fact that the funding they are looking for is to go on wages? Yep, even if you’ve not seen the show you can probably guess. The entrepreneur walks away empty-handed. If you are just trying to repay debt then perhaps it’s time to talk to the professionals and get some sound advice.
Types of finance (UK)
Consider all the funding options available. Look around your local area, talk to the chambers of commerce, find out the local investment trusts. Ultimately, make sure you pitch to the right type of funder to suit your borrowing requirement.
As a rough guide, consider:
Debt finance / Small firms loan guarantee (SMFLG) (
