As access to 'traditional' sources of credit continues to be a problem for many small companies, 'alternative' sources of finance are becoming more attractive for many small business owners.
Before the banking crisis, most small companies could reply on their banks to provide borrowing facilities. These days, not only are borrowing terms less favourable than they were, but some banks have been arbitrarily slashing overdraft limits for businesses which are deemed to be 'risky bets'.
Alternative forms of finance include factoring (to free up the value of your invoices for a fee), and public sector initiatives such as the Enterprise Finance Guarantee Scheme (which has had mixed reviews to say the least).
As savings rates and stock market yields have tumbled in recent months, many investors may also consider investing in small businesses.
This form of investment presents an opportunity for small businesses seeking working capital or replacement to bank debt. It is more stable as capital cannot be withdrawn - whilst bank debt may be pulled at short notice.
At the same time, many small companies will benefit from the valuable advice and support that experienced investors can provide.
Here are some of our most popular guides to attracting investors:
Essential facts about business angels
http://www.bytestart.co.uk/content/finance/funding/business-angels-finance.shtml
Business plans for business angels
http://www.bytestart.co.uk/content/businessplans/30_2/business-angels-plan-1.shtml
How to secure business funding for start-ups http://www.bytestart.co.uk/content/finance/funding/business-funding.shtml
Source: Bytestart
www.ukba.co.uk
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