Does your company have a fundraising strategy? If not it might be helpful to draft out a simple outline so that you know just where to start when it comes to raising funds for your small business.
You may be put off by such a grandiose title as a “fundraising strategy”, but don’t be. In actual fact, it need not involve reams and reams of complicated argument and justification, but simply set out some of your principal aims and objectives.
In essence, a fundraising strategy is simply a plan to help you identify your financial requirements in order to continue to trade and fulfil your company’s objectives. In addition, the strategy it is an outline of the resources needed and the timescales required.
Typically, fundraising strategies cover a period of between two and five years, but they may also be formulated in order to achieve a particular project.
Sources of funds
Businesses raise funds from a wide variety of sources, including:
- Grants and awards – may be available to start-up companies in areas of economic regeneration. You might want to find out more about government-backed grants for small businesses by visiting the official website;
- Earnings from the business itself – this is the revenue that typically drives forward your normal business activity;
- External investors – who are likely to expect a return on their investment with profits;
- Overdrafts – which depend on your having a good relationship with your bank manager and having made sure that you avoid the financial penalties incurred in unauthorised borrowing; and
- Loans – these may come from banks or other finance house and be in the form of secured or unsecured borrowing.
Small business loans
Short-term borrowing for small businesses, therefore, is most likely to take the form of overdrafts or loans.
For either form of advance, you might want to consider an approach to your bank. If an overdraft is offered you may find that the rate of interest is high and that it may take some time to arrange. Similarly with a loan from your bank, which may or may not require some form of security in terms of a charge on your company’s assets. This again may take time to arrange.
Merchant Money loans
Here at Merchant Money we offer a completely streamlined service in which your application for a business loan is typically considered within one working day, with the transfer of the approved funds taking minutes to complete.
If you are a limited liability company, with more than a year in business, we are able to offer loans of between £1,000 and £50,000 for a period of up to 24 months. We ask for no security against the loan other than personal guarantees from two of your directors, all of whom must be over the age of 18.