The need to sort business finance is high on the agenda of many businesses throughout their immediate and continuing development, as well as on their initial start-up.
The need of want for business finance can cover a raft of requirements and needs within any business. As such, often the thoughts in needing business finance of some sort can come to the forefront of many a business accounts meeting.
- We really need to sort some equipment finance
- We ideally need to sort some asset finance
- We’ll now need to sort a business loan
- We’ll need to sort a commercial mortgage
- We need to sort things, so let’s see if there are any business grants available to help?
Categories of Business Finance
Many businesses fail to realise what access to finance is actually out there. As the term, Business Finance covers a number of funding elements like Business Loans, Business Investment and Business Grants.
Although the above phrases are probably the main terms that businesses use when wishing to gain access to finance. Each one will contain a variety of business financing options within. For instance, did you know that Business Loans can include things like Equipment Finance, Asset Finance, and Commercial Mortgages and so on.
Description of Business Finance
As the term Business Loan indicates, money is loaned to a business for a set period of time. The business loan then being then required to be paid back by the business at an agreed fixed rate over the set time period.
Business Investment, as the term suggests would see third parties becoming involved in the business. This being by way of them purchasing a stake or holding within the business itself. With the consequence for the business being in them not being required to pay the investment back. Furthermore if agreed prior, at a later date they could attempt to pay back the full investment and more to the investor(s). Resulting in the business effectively buying the investor(s) out. This route to finance will and can be a very complex one, therefore as such, extreme care should be taken with the best advice sort.
Many Business Grants are seen by businesses as their preferred way to try and gain access to finance. Main reason being, that for this type of Business Finance it would not have to be paid back. That said, things have changed concerning business grants. With the criterion to secure a business grant now being made tougher with the introduction of Match Funding.
So for a business to be able to secure a business grant, defined and clear benefits will need to be proven. One current and targeted benefit being the creation of jobs. In addition to which business grant governing bodies will wish to see businesses putting their money where their mouth is.
How to Match Fund Business Grants
This they do by requiring those businesses seeking grants, to match fund the overall business grant value which they wish to secure. So if after a business grant of £50,000, the business will have to match fund a percentage of it. Meaning that if advised they have to match fund 50% of the business grant value – they will have to contribute £25,000 themselves, in order to get a £25,000 business grant award. Therefore making the £50,000 total they are after. Please note match funding percentage values change on a per grant basis. On average such percentage, values range from between 25% – 70%.