What is alternative funding and how can it help your business?

Alternative funding is becoming increasingly popular for many small and medium sized businesses and could be the key to your growth and expansion plans – or simply make running your business a little more stress free.
alternative-funding-SME

Alternative funding is becoming increasingly popular for many small and medium sized businesses and could be the key to your growth and expansion plans – or simply make running your business a little more stress free. Typically, with an SME the need for a boost in cash flow is something that can happen quickly and needs immediate attention to ensure your day-to-day operations keep running smoothly. There was a time when the only option would be to head down to your local bank and begin the lengthy process of applying for a business loan – which may never materialise. Well we’re glad to say these days, that’s not your only option.

What is alternative funding?

Alternative funding, in short, is any type of business funding that doesn’t come from a mainstream provider like your high street bank. Whilst traditional mainstream funding options may be great for some businesses, they aren’t always the most feasible options for a small business. This is because banks often have a whole host of criteria that an SME just can’t fulfil, so they need to explore other options.

Alternative funding is a route more and more SME business owners are using to support their growth plans or to simply help maintain the day-to-day business activity. So, if your business needs cash fast or the bank has turned you down, Compare Your Funding will find the right alternative lender to keep your business moving.

Today there is a wide array of funding options available to support small and medium businesses. Each option offers different advantages that are important to consider before deciding on the best solution for your business. And our team of funding experts are on hand to guide you through the whole process of selecting and setting up the funding option that is right for your business. 

Some of the most common SME funding options include:

Asset Based Lending

Through asset-based lending you are able to boost your cashflow by getting more out of your assets. There are a few ways this can work; you can use asset-based lending to help you purchase new equipment or release cash tied up in your existing assets. There are multiple forms of asset-based lending to explore, including equipment leasing, finance leasing, operating leasing, hire purchase, contract hire and asset refinancing.

Bridging Loans

Bridging Loans are a form of fast, flexible short-term lending. You might have heard this called a ‘swing loan’ or ‘gap finance’. In short, this type of funding can help you ‘bridge’ the gap in your finances whilst waiting for a long-term financing solution to be put in place or receiving funds from another source.

Invoice Discounting

By using Invoice Discounting you are able to release cash tied up in outstanding invoices. You manage your customer relationships and chase payments but a lender with loan you the money you are owed on your invoices before they are paid.

Invoice Factoring

Invoice Factoring is very similar to Invoice Discounting in that you will be lent the money owed to you on outstanding invoices from your customers. However, the lender will also chase for payment on these invoices.

Vehicle Financing

Purchasing vehicles can be a big outlay for small business – whether that’s a commercial vehicle, a fleet of HGVs, busses or coaches. Using Vehicle Financing can help you make this investment and expand your vehicle fleet whilst reducing the risk to your business.

Whatever it is that you need alternative funding for, we’re here to help. Compare Your Funding is a completely independent funding broker and we’ve built strong links with all major lenders across the UK. We believe in taking the hassle out of business funding so that you can focus on running and growing your business. So, to talk about your options and for a free business funding review call us today, 0161 871 9840.

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