Growth finance

Growth Finance

Obtaining investment to fund the growth aspirations of your business

Many small businesses have plans beyond their capital, meaning external investment is necessary to achieve growth. But before sourcing finance, you must make sure you have a winning business plan in place, all investors will ask to see one.

My business needs to grow – who can help?

High street lenders have traditionally been the trusty mainstay of commercial finance, and the saviour of many small businesses. But their risk appetite is ever-diminishing leaving a funding gap for alternative finance providers.

Alternative funding solutions are emerging all of the time and work to connect the fundraiser directly with the funder. They are often more cost-effective to set-up and can be debt or equity based.

It’s about more than a simple bank loan

There are a number of different funding routes available to SMEs depending on the stage of your business, your reasons for borrowing and the collateral you have available. Here’s the main ones:

  • Grants and regional funding
  • Equity finance
  • Debt finance
  • Crowdfunding
  • Peer-to-peer lending
  • Friends and family
Growth finance

Do I need to be prepared?

Obtaining finance is a big step for any small business to take; it’s fundamentally a move towards carrying more risk. Your decision to seek external funding should be a well-considered one, and your research into the different funding types should be thorough.

As a starter for ten, investors will ask to see a robust business plan. This is to prove the stability of your business, and more importantly provide the reassurance of them receiving a return.

What are the main considerations?

  • What security do you have to offer?
  • Are you prepared to sacrifice equity in your business?
  • How long would you like to take the finance over?
  • Are you confident in your management team?
  • What is your long-term goal; is an exit strategy in place?
  • Is your business stable and robust to external challenges?
Growth finance

The benefits of debt

It may seem a risky path to commit to the pressure of external finance but it’s often the turning point of many start-up or early stage businesses. Funding generally accelerates growth and can be a saviour in the hard times. It’s often sought when demand is unexpectedly high and the need for investment is immediate.

External finance allows you to:

  • Purchase additional stock
  • Expand your workforce
  • Invest in technology, plant and machinery
  • Move or develop your premises
Growth finance

“One of my clients needed additional funding so we discussed the benefits of different types of finance with Pegasus. It was decided that Crowdfunding was the best way forward. Pegasus made the application for us and the funds were raised. My client was not only happy but also impressed with the professionalism within our network.”

Peter Kroeger, MD – Kroeger & Co.