How to fund your business growth

How to fund your business growth

Is your business ready to take the next step? Expanding your business could increase your revenue, but you just need an injection of cash to get the ball rolling. If so, many business and commercial finance options can help fund your business growth.

This guide is for businesses looking to expand by increasing turnover, moving into new premises, buy new equipment or take advantage of a new business opportunity.

Increasing your revenue with business finance

Increased business turnover says a lot about your business. It suggests that your position in the market is improving and that you are doing more business with more clients. All this makes you far more attractive to new clients and business partners.

In real trading terms, it will also secure your working capital to pay for operating costs (salaries, equipment, maintenance). If you need to improve your working capital to expand your business and increase revenue, working capital finance can help you pitch for larger contracts, get in larger quantities of stock or equipment and operate on a larger scale all round. All of this will boost your ability to grow.

Working capital finance usually comes in the form of short-term business loans to keep business costs covered when you need to spend on things like buying in bulk or purchasing new assets.

There are many expanding business loans on the market and with the right advice, you will be able to find the right fit for your needs.

Funding property and asset purchases

There are several different finance options to help you purchase new assets or property as part of expanding your business:

Asset finance

Asset finance options allow a business to purchase the equipment they need for growth through a range of leasing, hire and purchase options that best fit each business.

Buying premises

As your business grows, it is likely that so will your staff head-count. You may also need additional warehouse space or car parking facilities to accommodate your growth. Depending on what property you need and what your financial situation is there are different options including investment property finance, bridging finance, property auction finance and mortgages, to help you secure a property.

Investment routes for business expansion

You could seek investment to fund business growth. Business angels are successful entrepreneurs who invest in companies with high-growth potential. They will bring contacts and a wealth of experience as well as their cash but will require a share in the business (often a large one) for their input. While this is a great move for some businesses it might not be right for you, consider every partnership and deal in depth before making a move.

Private equity is a good avenue if you require large sums, usually over £2 million and being bought out is part of your strategy. "Private equity firms typically invest majority stakes in under performing companies [with] potential for high growth. Growth is delivered by working with the company's management team to improve performance and strategic direction, making complementary investments and driving operational improvement," state the Private Equity & Venture Capital Association.

Crowdfunding is becoming an increasingly popular funding route, where businesses raise small amounts of cash from a large group of people in exchange for incentives. Peer-to-peer lending is also a growing route.

Whatever route you choose to explore to fund your business growth it is worthwhile getting business advice and finding tailored business finance that is crafted to directly meet the needs of your company and growth strategy.

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