How to Raise Business Finance

It isn't easy running a business, particularly in the current economic climate, and sometimes you could do with a little extra help but the question is - where from?

If you find yourself in a position where you need a cash injection, things will be going one of two ways. Firstly - and hopefully the one that applies to you - is that the business is expanding and you need more resources.

The second being that things have taken a turn for the worse and your business is running out of money.

There is help at hand, whatever your situation, from a variety of sources but where you turn depends very much on your business and whether it has been up and running for some time or whether it is a relatively new venture.

Friends, family and business partners are usually the first point of call for anyone who finds themselves in need of some extra cash. However, if these sources don't have the spare cash available there are those people, such as business angels, that will be willing to inject cash into your business.

Business angels are entrepreneurs or retired business people that have cash available to inject into businesses. There is, however, a catch. Angels only usually supply funds if the business model and plans are really good and have a unique selling point that they believe will allow the business to growth over the long-term.

If none of these are viable options for you and your business, or you have exhausted their funds, then there is always commercial lenders.

Banking On It

Many business owners are concerned with borrowing money or looking for outside investors because they don't want to be in debt to friends and family, or give up part of their business.

However, when it comes to raising a few thousand pounds going it alone can be tricky. Banks offer loans to businesses and, according to recent figures, this is the route that around two-thirds of businesses opt for.

There are, of course, disadvantages to going to your bank for a loan. First of all you will no doubt be required to offer the bank a form of security in return for them lending you the money, which is usually your house.

This means that should you fail to keep up the repayments on your loan, you could lose your home - and you business if it doesn't work out.

Of course, in many cases you have no other choice than to go to a bank for a loan, especially considering that they are often prepared to loan up to £100,000.

However, should you require more than this, you will have to look to specialist firms - such as venture capitalists.

Opting For A Specialist

Opting for a specialist to inject some much needed cash into your business depends heavily on what kind of company you are running and what your track record in the industry is.

There are investors out there that specialise in certain sectors, such as technology, and can offer ongoing support for new businesses.