We have a problem: Right now we have more interested Angel investors wanting to make an investment then we have suitable companies seeking funding! In all the years we’ve been arranging deals this is a first for us!
Where are all the entrepreneurs? We think you’ve been so put off trying to find money that you have geared back your growth plans.
We think there has been so much negative press about the inability to fund a company that many managing directors have either given up or are not approaching the funding market at all. However, there are some tricks to generate funding.
The most familiar route to finance is the high street banks, but are they in business or not? If you’ve sat in front of a banker over the last few months you will undoubtedly say no. However, the trick to achieving funding is the ability to package your financial needs in order to mitigate the risk to lenders.
In this economic market it is almost impossible to meet your funding requirements via one single source.
The most effective package is one that is backed by a Business Angel investment. Once we can interest an Angel to invest in your company this most often will provide banks with the confidence to lend money.
By demonstrating that you have the experience, mentoring, guidance, and money from an investor, the banks often consider this as a solid foundation to justify a loan.
The second trick is to combine equity with bank lending with other vehicles such as asset finance, factoring/invoice discounting, and leasing.
The third trick is to try to leverage all of the above with a grant or other award.
The final trick is that the funding market is very small and people do talk to each other. If you are not prepared or investor-ready yet you persist in sending business plans to everyone you will become stale fast. Unfortunately you seldom get a second chance in this game.
The final trick is to send your plan to us and we will reply with a very candid assessment of our opinion on your ability to generate funding.
* This column is sponsored by Advantage West Midlands. www.centralenglandbusinessangels.com info@cebangels.com
* Others finance initiatives supported by the Agency can be viewed at :http://www.advantagewm.co.uk/what-we-do/helping-business/finance-for-business.aspx
