Eenie, meenie, minie, mo!

You are looking to grow your business, but cashflow is a problem. You have seen many funding solutions, but how do you choose which is the best for your growth plans?

It’s a question asked every day by thousands of businesses up and down the UK.

So, how do you do it?

Do you create a list of options and make a random selection while blindfolded? Do you spin the wheel of fortune or visit Gypsy Rose Lee and get your tea leaves read?

Or do you consult a professional broker with years of financial services industry knowledge and experience, who is regulated by the FCA?

It’s a no brainer. But there are still business owners who don’t know where to turn to when it comes to the bewildering choice of finance options available. They are kept awake at night by a multitude of questions; do I look for debt or equity funding options? How long will I need funding for? Is it a short-term fix for maintaining cashflow and to pay the wages or is it the solution to a longer-term problem? How much debt can I afford? Do I want to cede control of my business to investors?

There is a seemingly endless list of questions. The answers to these questions, and others like them, are best provided by professional advisors. Firms like Pegasus Funding Resources can support you through your business development and talk you through the options that are available.

And how do you prepare to take on funding?

Firstly, you will need to prepare your business, which is a complex and time-consuming process. There is an endless list of questions you need to answer. From those answers, you will then need to develop a robust, investment ready business plan. Investor readiness services, including business concept reviews, business plan scoring and business plan mentoring services, are invaluable in negotiating this process.

Once you have a robust business plan in place, you will need to decide if you are looking for debt or equity finance.

It is important to remember that in raising equity finance you are selling shares which represent a part of your company. Equity finance can come from various sources, including family and friends, business angels, venture capitalists, special equity funds and flotation. Bear in mind though that only around two per cent of companies succeed in finding equity investment. To succeed, you must have an exciting proposition with good growth prospects and a strong management team. Investors are generally looking for something beyond the concept stage. They want a good return on their investment.

Raising debt finance is a more traditional, and perhaps an easier, option. Debt finance comes in many forms and the choice is usually determined by the type of security available. With debt finance, you retain control of your business although you may have to give personal guarantees or debentures over the business assets. Again, there is an array of options for raising debt finance open to you from bank loans and overdrafts to trade and asset-backed finance.

Making the right funding decision for your business is an important decision not to be underestimated. However tempting it may be to dash out there and take the first offer on the table, you need to remember that the decisions you make today, will affect the future of the business.

So if you need to take the mystery and uncertainty out of choosing your funding options and want to get prepared to take on finance for your business, contact Pegasus Finding Resources today on 0203 327 0567 for professional, practical and easy to understand advice.

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