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Live Forum Q&A – Getting Funded

Discussion in 'Money, Accounts & Finance' started by Lace, May 13, 2013.

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  1. Lace

    Lace Retired Moderator

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    If I wanted to borrow from a P2P, meeting someone from the company will be more comforting! Saves a lot of time from asking Q's via internet - but then that's just me :)
    Anthony likes this.
  2. Rob Jones

    Rob Jones

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    Hi Oliver. I think you are absolutely right. The traditional lenders see online businesses as "high risk" and often prefer not to help at all. The other downside of bank loans is the duration, the banks are keen for you to borrow over years whereas we offer short term loans over months and offer the flexibility to repay early saving a wodge of potential interest charges!
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  3. paulbrown

    paulbrown

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    My business was a clothing line I was starting from scratch, I had taken it so far but needed funding to bring stock in.
    I had a professional business plan and made a sales pitch to a high street bank, showing what I had done so far including look books, website and clothing samples I wanted to bring in.
    They lent me half the money I required and a family member lent me the other half.

    I found the APR was a lot lower than other funding opportunities avaliable.
    Lace likes this.
  4. Erik

    Erik

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  5. Emma Jones

    Emma Jones

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    Interesting. We are already 'crowdfunding on the High Street' through PopUp Britain which is where we are opening up empty shops and filling them with small businesses who share the costs so it's affordable to have a High Street presence.

    I wonder though if Funding Circle is suited to the High Street as their online/low cost lending model makes them competitive - may not be the case if they take on the overheads of property? They would be welcome to PopUp with us!

    Emma
    Anthony, Dave and Lace like this.
  6. Sam White

    Sam White

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    Anthony is right. One of Government's schemes (Business Finance Partnership (BFP): Small Business Tranche) aims to both increase the supply of capital through non-bank channels and, in the longer term, to help to diversify the sources of finance available to businesses.

    The seven successful lenders been announced and are expected to facilitate total lending of more than £240 million to SMEs by attracting private sector investment alongside government’s funding. The seven lenders are: Market Invoice, URICA, Beechbrook Capital, Funding Circle, Zopa, BOOST&Co, and Credit Asset Management Ltd. Details of the lenders are below:

    • Market Invoice has been awarded £5 million. It is an innovative online platform through which SMEs can raise funds by selling individual invoices to a pool of investors.
    • URICA is being allocated £10 million. It will establish a new supply chain finance platform to provide a consistent channel of cash from institutional investors to SME suppliers by enabling early payment of their bills to mid-sized growth companies.
    • Beechbrook Capital is receiving £17 million. It is a mezzanine fund manager and will establish a new fund to lend to SMEs focused on growth capital.
    • Funding Circle, which will receive £20 million. It is a peer-to-peer lender enabling British people to lend money directly to small businesses in the UK and offers a faster and more efficient way for businesses to borrow finance
    • Zopa will receive £10 million to offer in loans through peer-to-peer lending. Through its website investors can lend directly to small businesses, offering a more efficient way of helping firms to access loans
    • BOOST&Co, a new fund management company focused on lending to growing and innovative small businesses, will receive £20 million to set up a fund that will make loans between £1 million and £8 million to small businesses
    • Credit Asset Management Limited, a subsidiary of City of London Group plc which provides specialist financing to the SME sector, will receive £5 million to provide asset finance and professions loans.
    If you want to find out more have a look here gov.uk/government/news/70-million-boost-to-small-business-lending and news.bis.gov.uk/Press-Releases/Small-businesses-offered-110-million-of-new-finance-684c2.aspx
    Anthony likes this.
  7. Lace

    Lace Retired Moderator

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    Thanks for that question saimontes, panelists - what should be inside a business plan?
  8. paulbrown

    paulbrown

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    This sounds interesting, are popup britain nationwide or just london? I would be interested in this possibly.
  9. Emma Jones

    Emma Jones

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    I have to Pop Off now to make a meet. Lace and Team TWF - thanks so much for having me. Hope businesses stay profitable and get funded on the back of the advice!

    Emma
    Lace likes this.
  10. James Day

    James Day

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    Always make forecasts, Sai - investors want to know that you know which direction you want to take the company in, where the finance will come from, and how much. It also shows that you envisage yourself being there for the long haul. Projections are generally based on exponential growth figures, so they're never going to be spot on, but if you can make it an intelligent estimate, founded on sensible reasoning, then you should achieve it, or close-to. Best advice I can give!
    Sai Montes and Lace like this.
  11. Gary

    Gary

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    Some of the key questions to ask yourself when seeking finance are:

    1) Have I carried out enough research in order to properly calculate risk, necessary investment, etc?
    2) Have I taken enough time to prepare everything that I may need in order to increase my chances of success and learnt it so I can answer any questions with confidence?
    3) Have I looked at my business from the view of a potential investor / lender & does it look / sound attractive?
    4) Can my business grow / expand at a fast enough rate to satisfy a potential investor or can I keep up with repayments if a loan?
    5) Is my current income strong enough to sustain my business including loan repayments should things go wrong?
    Anthony, Sai Montes and Erik like this.
  12. Emma Jones

    Emma Jones

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    PopUp Britain is going nationwide! We currently have shops in london with new locations to follow. You can see all details at popupbritain.com

    Hope that helps
    Emma
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  13. Erik

    Erik

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    A question for Sam, how are the stats looking for approved online businesses?
  14. Sam White

    Sam White

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    I agree, mentoring can be extremely valuable. But you don't have to get angel investing to benefit. You can find a business mentor at mentorsme.co.uk to help you develop your ideas and grow your business. There are over 115 mentoring organisations on the portal, funded and operated by the British Banker’s Association, providing access to 27,000 business mentors.
    Anthony likes this.
  15. James Day

    James Day

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    Start-Up Loans also offer mentorship as part of the package (with the investment).
  16. Sai Montes

    Sai Montes

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    Very helpful, indeed! Thanks for your advice, James! Thought the figures I'll have should be very accurate but this gave me a big relief!
  17. Erik

    Erik

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    Our Q&A is now about to wrap up guys. Panelists, do you have any closing remarks or pointers that you would like to share?

    Please note that this thread will be left open for anyone who still want to continue the discussion. Also, let's not forget our giveaway! The winners will receive exclusive TWF mugs and will be announced after our panelists' closing remarks.
  18. Gary

    Gary

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    A closing word from me regarding anybody seeking finance which sums up some of what i (and others) have been saying today:


    One thing to remember when applying for finance is that your investor will also be investing in you, not just your business, you can have the best plans in the world, but if you come across as someone who may not be able to execute them without too much hand holding, then the chances are you will struggle for finance (if you can even get any), in this case, maybe seek a partner who has the required skillset instead (if doing this make sure to have legally binding contracts written up to save problems later).

    If seeking an investor or loan, you need to be confident in your business, your future plans, know everything inside out and back to front, including accurate earnings, profit forecasts, etc. and look the part if meeting in person (this can even be achieved to a degree if online by the way you represent yourself & your business, there’s nothing worse than meeting with a potential investor looking / coming across too casual, being shy, mumbling words and forgetting important information, we’ve all seen or at least heard of Dragon’s den, the ones that look presentable, are confident, have the ability, and have a sustainable & profitable business plan will be the ones more likely to succeed in getting their investment, so again, represent both yourself, and your business as best as you possibly can!

    Something else to think about to anyone looking to get a loan is your CURRENT position, are your current profits enough to sustain your business and any loan repayments just in case things go wrong even if you hit a slow period?

    Granted, your risk should be well calculated, but sometimes even the best laid plans can go wrong, so be sure that you will still have a business in this eventuality, ok, it may not happen, and if not great, but you need to be aware of any eventuality just in case, and never take more than you can afford to repay based on your current standing or apply for finance that isn’t absolutely necessary.

    I’ve seen it many a time where people and businesses have taken loans on top of loans, then more loans to consolidate to a point where they couldn’t function without finance, and when they hit a bit of a downturn they inevitably went under, make sure this is NOT you, again, become a success & NOT a statistic!


    As a side note; personally I have never used finance (as some here may have seen me say before), I have however advised many people in various aspects of business which as a result has led to people that I have advised successfully receiving finance from both banks and investors at various stages.

    All the best!
  19. Rob Jones

    Rob Jones

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    Thanks for
    Thanks everybody, Good hustle. I hope it was useful. Great to share opinions.
    Lace likes this.
  20. Sam White

    Sam White

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    Unfortunately, there is no perfect business plan :( . But we have worked with the accountancy body ICAEW to give some useful tips. They are available on page 3 of the guide: icaew.com/cffsmefinance
    Lace likes this.
  21. James Day

    James Day

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    Thank you all! Some really insightful discussions there:

    Some useful resources that you may consider, to extend the conversation (or over lunch!) - apologies for the bulk of them, but they're all really useful, I promise:

    ingeniousbritain.biz/latest-news/alternative-finance/ingenious-britain-talks-to-simon-dixon-on-the-new-kid-on-the-crowdfunding-block-banktothefuturecom/1007/100761 - Interview with Simon Dixon, CEO of crowdfunding platform Bank To The Future.

    ingeniousbritain.biz/latest-news/alternative-finance/crowdfunding-investment-decisions-driven-by-business-idea-market-potential-and-entrepreneur-experience/1007/100574 - Crowdcube give us their tips on how to make yourself investable.

    thewholesaleforums.co.uk/blog/alternative-funding-options-for-small-businesses/ - My article on alternative funding options for small businesses.

    gov.uk/government/publications/sme-access-to-finance-schemes-measures-to-support-small-and-medium-sized-enterprise-growth - Gov’t access to finance schemes - REALLY useful for seeing which local schemes are available in your area, or on a national scale.

    ingeniousbritain.biz/latest-news/ways-to-fund-your-sme/100327 - Information about SEIS.

    ingeniousbritain.biz/latest-news/alternative-finance/concerned-with-your-cash-flow-or-have-a-history-of-receiving-late-payments-maybe-its-time-you-checked-out-invoice-trading/1007/100839 - Information about Invoice trading

    ingeniousbritain.biz/latest-news/alternative-finance/alternative-small-business-finance-through-regional-growth-fund/1007/100784 - Regional Growth Fund

    ingeniousbritain.biz/weekly-news/reader-stories/kickstarting-a-crowdfunding-campaign/1014/100079 - Kickstarting a crowdfunding campaign, by one of our readers. An honest, frank account of the trials and triumphs she's experienced.

    ingeniousbritain.biz/latest-news/sales-and-marketing/market-your-business-through-a-pop-up-shop/1010/100664 - Marketing a business through a Pop-up shop (one for all those interested in Pop-ups).
    Lace likes this.
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