You want to run a business, but finances are tight. Do you know what funding options are available for your new venture? Transworld Business Advisors UK offers guidance for anyone considering owning a business.

Buying a business – whether your first one, or adding to your business portfolio – requires finance. Not everyone has access to the finances with which they can invest in their next venture. But this doesn’t need to hold you back, if you are determined this is the career move you want to make.  

As business brokers, Transworld Business Advisors is the connection between sellers and buyers when a business is for sale. We collaborate with the right people, to ensure the right result is achieved for a successful deal, which includes confirming the buyer is in a position, financially, for the negotiations to proceed. Whilst we don’t offer funding directly, based on over 40 years’ experience, we have developed relationships with strategic finance partners, any of whom we can introduce you to.

There are more than 20 funding options available to finance your next business venture. The most commonly used, include:

•  Asset Finance: Taking out finance against assets already held
• Invoice Finance: Lending against invoices (accounts receivable) owed to the business
• Commercial Mortgages / Loans: Similar to residential mortgages and loans, taken out from banks and financial institutions
• Peer-to-Peer Lending: Organisations which join together people with money who are looking for a business investment, and people without money, who have a profitable idea.

 Other sources worth considering are:

• Seller finance / deferred consideration: This is when a seller agrees when and how they will receive the money for their business. Part is paid upon completion, with the rest paid over an agreed time-frame. Terms are agreed according to revenue targets, profitability targets and/or interest rates, etc. This option benefits both parties:

1.     For the seller: They potentially receive more money for their business, and increase the chance of a sale

2.     For the buyer: A confidence measure, as it shows how much the seller believes in the continued success of the business, once they have exited

• Business investors: These are private investors – aka Business Angels or Sponsors – who financially invest in start-up companies they believe in.
• Borrow from friends and relatives: Prepare for speaking to them in the same way you would prepare to speak to any lender. Set out your business plan, a case for why they should invest in you, and set clear repayment terms. It is also a good idea sign an agreement between you, in order to protect your relationships, as much as you can when money is involved.

If you want to discover more about how to finance a business, speak to your local Transworld Business Advisor, who can help you find your next venture, and advise you on the best way to finance it.