Like any business, there are many 'urban myths' surrounding the world of business finance - never moreso than in these tough times.
Whilst mostly harmless, sometimes these myths can hinder the legitimate chance of funding applications.
Here I look to dispell 3 of the most common myths presented to me:
Myth 1: Start Up Loans: there is no such thing - and never has been such a thing as a start up loan,
Whilst, for a period the banks used secured loans (loans charged against property) as a uniform facility for start-ups, the relevance of the facility was secured, not start up.
Like any business, a start up will have a number of different requirements and different facilities which may be appropriate. does the business nee to buy equipment? To fund forward orders, or simply a 'dip in' facility to accomodate the peaks and troughs of trading.
Understanding business needs will help us to evaluate viability and to suggest the most appropriate options.
Myth 2: Crowd Funded Loans: crowd funding is an interesting and positive response to the banks' reluctance top lend. It is NOT, however in any way an easy or soft option. The 'crowd' consists of any number of people who have worked hard for their money - they are understandably reluctant to lose it on random projects.
Before they let go of their money, the Crowd will want to see good, comprehensive & current financials as well as a compelling story to persuade them.
Myth 3: Equity finance: This old chestnut! Dragon's Den isn't real! In order to attract equity investment you need to do much more than chat to a prospective investor for a few minutes. even once they have agreed to invest there is a lengthy due diligence process.
In addition, investors will want an ongoing relationship with your business an a degree of influence over key decisions - they won't just give you cash and walk off.
we have spent several decades understanding the market - trust us - we now more than the bloke in the pub!
