What Other Sources of Finance Are There?
Although we specialise in Angel Investment or loans from Angel Investors, it’s important that you know that this source of finance is not sometimes the cheapest, so you owe it to yourself to check out and exhaust as many other potential sources of cash as you can.
You may be able to combine two or more of these to reach your goal.
Here are 13 Potential Sources of cash:
- Yourself - the more money you can put in yourself, the better it is for you and the more faith others will have in the project.
- Equity in your home - could you release any?
- Family - those who know you best and who show faith in you would encourage others who don’t know you as well.
- Friends - you can get one or several to club together and pool resources. They will expect a higher return than Family will.
- Current employer - if you are still employed, could you negotiate a redundancy package? Could they lend you money?
- Sell some stuff - what do you have that’s surplus to requirements that could be sold for cash.
- Profits - If you have en existing business could you use the profits? Could you increase the profits? I recall a request from a small manufacturing firm for £50k We worked out that they could advance-sell enough items on the internet to raise the cash they needed. Pre-order amounts generated over £65k and they had 28 days to fulfil the orders.
- Local authority or government agency grants or loans - In Scotland there is a completion called the EDGE where a business can apply for a grant of up to £100k
- R & D Tax Credits - many SME’s or start-ups are unaware of these. Once firm we dealt with raised £28k this way.
- Credit cards - if you are still employed, apply for as many cards as you can get with as high a limit as you can get. NB this is a risky strategy but in the right circumstances it can work or at least help.
- Unsecured loans - If you have a business, have three years accounts and a decent credit score, you can get up to £150k in unsecured cash. This can be a very quick way to raise funds. It does depend on your turnover but smaller amounts of £20k to £50k can be accessed relatively quickly i.e. in less than a week.
- Asset Finance or invoice financing - there are companies out there who specialise in this. You can get 70% or even 80% of the value of an invoice you send out to clients from a factor. I’ve also seen small businesses sell an asset (car or equipment) and lease it back.
- Banks - despite what you may hear, many banks will still allow you to arrange an overdraft facility. They may even do small loans of up to £25k
This and many more subjects will be expanded on in the Raising Angel Finance Course in Peterborough. For more information contact; karlenepartridge@progressiveproperty.co.uk
Ray is a shareholder and Regional Manager for www.AngelsDen.com and Property Angels Den where investors are introduced to entrepreneurs or developers seeking finance. If you have a proposal click here: Application form page: http://www.designedliving.co.uk/investment-application-form.html
If you are interested in becoming an Angel Investor, Click here: http://www.becomeanangel.com
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