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Business Finance for new start businesses

It is still incredibly difficult for a new start businesses to obtain any sort of  business finance via the high street banks. The good news is that there are still a number of independent finance companies willing to provide funding, however they will do so very much on their own terms. It is slightly easier to obtain cash flow funding in the form of factoring or invoice discounting. The independent finance companies tend to be more flexible than the high street banks but there are a number of instances when we would recommend the banks for this form of finance.

Enterprise Finance Guarantee Funding or (EFG Funding) probably isn’t available for new start businesses. This form of finance is only rally available for businesses who have  good trading history, are profitable have a project that is viable form a rational and cash floe point of view however there isn’t enough security to enable the banks to make an offer.

Asset finance is available for new start businesses however as a rule of thumb only £10k of finance will be available for each director so long as a personal guarantee is available, the directors have a clean personal credit history and also have a reasonable amount of equity in their properties. Any new start business wishing to purchase assets costing more than £10k face a slightly more uphill struggle. I will tell you how in Mondays blog.

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