Equity Finance » Finance Business

How Does Bridging Loan Finance Work

admin — Mon, 20 Sep 2010 22:43:59 +0000

Business and commerce is a popular use for bridging loan finance. Although many believe that this kind of secured credit is expensive there is a time and place for this kind of loan. To give a typical cost of bridging loan finance lets look at what you would pay to borrow

UK Finance for Business

admin — Mon, 30 Aug 2010 08:25:25 +0000

Running a business and becoming successful in that venture requires a lot finance and financial assistance. In UK finance for business can be got from different sources. Business related financial services are provided by many organizations in that field. UK finance for leasing a company or organization, UK finance for debt collection, UK finance for Venture Capital can also be arranged.

There are companies that help a business in hire purchasing and arranging for leasing. You can approach such dedicated companies for such services. UK Finance for hardware funding for the information technology business is also available in companies. Leasing services for small businesses, agricultural and industrial funding operations are available in companies dedicated to that service. A company called Richard Mares Asset Finance in UK finances for agricultural and industrial setups. If you need information on UK finance for equipment leasing, mortgages and commercial finance then you can approach companies like 1st Leasing Company and 1pm.co.uk. Many options for UK finance are available with them. Just check out their website for more details on the different types of finance available with them. For UK finance from

Corporate Finance – Some Key Terms

admin — Wed, 18 Aug 2010 20:14:02 +0000

Corporate finance in business is a general term used to describe anything in a monetary field to do with businesses. It is used to describe not just terms which involve the flow of money throughout a business e.g. revenue and costs, but also describes the tools which are used in order to calculate said figures, in order for data that has been collected to be analysed. This gives the numbers meaning, or better, an actual context which could be used in order to help a business keep on top of its cash flow and run more efficiently.

There are hundreds of different terms used in businesses to talk about money and each of them have different meanings, or just something minor which is different from the one before, in order to produce a totally different number all together.

The following are a few terms used within business to describe certain aspects of the business on a monetary basis: Assets (Current & Net), Stock, Shares, Costs (Total, Fixed, Variable), Profit (Gross & Net) and Price Elasticity. Price Elasticity is more to do with the running of a business, not as a whole, it is more aimed towards certain products themselves instead of the whole product portfolio. All of the other terms look at the business as a whole, or can be used to take a step back and look at it as a whole instead of smaller departments.

What is the point in knowing these numbers if you are not going to do anything with them? Well the answer is there isn’t really that much of a point. As the previous titles stand, they are pretty much meaningless, not giving a user any indication of what is what it is just there. Hence, why the handy tools known as formulas were invented, in order to turn that data which is gathered into some much needed knowledge and understanding.

Some of the following formulas are used within the business world: Profit, Contribution, Break Even, Investment Decisions, Company Accounts and many more. Each have their own contribution in telling a user how the company is doing and some are used to predict trends to give a possible snapshot of the future e.g. Profit and Loss accounts & Time Series Analysis. These simple predictions take into account the trends that have been developing, then keeps the trend going to give a brief outlook on what would happen if everything continued at the same pace. This can help give an excellent outlook into the future of your business and finances.

By: Barry Trevor

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Business Finance with Equity Finance

admin — Mon, 28 Sep 2009 02:56:19 +0000

It has been said that nearly 61% of businesses are launched with either private capital or capital that is invested into their business by family and friends but investment doesn’t have to stop with merely just your family and friends, which is why equity finance exists.

Equity finance is cash that is invested into your business in return for a share of your business. These investments of cash never have to be repaid and don’t have interest attached to them. Equity finance is true risk capital as there is no guarantee that the investor will get their money back at all and these investments are not tied to assets that can be removed from your business should it fail.

The way in which investors get a profit from their investment is the fact they have a share in your business. This share means that investors either get money that is generated either through a sale of the shares once the company has grown or through dividends, a discretionary payout to shareholders if the business does well.

There are several types of equity finance such as business angels and venture capitalists. Each type of equity finance varies in the amount of money that is available for investment and the process of completing the deal.

If your business can support a growth rate of a least 20% you are more likely to be able to get equity finance. If you can’t generate a growth rate of at least 20% in your business then you are unlikely to be able to gain equity finance. It is the idea of control and the prospect of higher returns if your business is successful that attracts people to invest in your business

Sadly however many people are still highly reluctant to seek the help of equity finance as they see the idea of it as ‘relinquishing control’ of their business. Many small businesses are especially reluctant if their business is growing fast. As a business owner you should ask yourself the following questions below making any decisions about choosing to use equity finance:

• Are you prepared to give up a share of your business as well as some of its control?

• Are you and your management team confident in the business and the products and services that are on offer?

• Does your business have a unique selling point?

• Do you have drive to grow your business?

• What industry experience and knowledge does your management team have?

You should also consider the following when it comes to obtaining equity finance:

• How much funding do you need?

• How much control are you hoping to retain?

• How long do you need your funds for?

Each business should investigate the options that are open to them when it comes to finance. Equity finance is medium to long term finance and is the perfect type of finance that is open to small businesses, especially if you are an entrepreneurial business. Entrepreneurial businesses are what private equity investors are mainly interested in. This is because they have aspirations and a high potential for growth.

If you are interested in the use of equity finance it is important that you speak to a financial team who can put you in touch with people who will be able to put you in touch with the right investors.

By: Helen Cox

Business Angels and Your Start-up Finance

admin — Tue, 01 Sep 2009 20:54:07 +0000

Business angels fall under the category of equity finance. They form the most popular form of equity finance and can truly do wonders for your business venture.

When it comes to starting up your own business the most important thing to sort out before anything else is your start-up business finance. You will need funding for your business before you even start trading. No matter what type of business you are planning to go into, whether you are selling a product or a service you will need to secure finance before you open your business up for trading.

Funding for your business can come in many forms, ensuring that you choose the one that is best for your business is the tricky part so here’s some helpful advice. Most new business fail due to incorrect funding with many making the mistake of turning to their bank for finance only to find out that the bank refuses to give them the capital they need and with many more finding out the hard way that they can’t keep up with repayments, which ends with them losing not only their business venture but typically their house that they thought was a good idea at the time to use as an asset to their bank loan.

You’re probably left thinking now ‘what am I going to do?’ well lucky for you there are people out their waiting to give you money for your business start-up funding that you, wait for it, don’t have to pay back! Who are these kind people I hear you cry, business angels of course. A business angel is a high net worth, wealthy individual who has already made their fortune through other business ventures. They are often retired individuals who invest their skills as well as capital into new and developing businesses. Business angels invest money into your business that you never have to pay back in return for a growth share of your business.

Business angels typically seek investments that will give them ten times more back than their original investment within five years of your business being active. They invest their own funds and usually invest between £10,000 and £750,000.

As well as cash, business angels can offer years of experience in the business world. Although some prefer to become a sleeping partner, others will get actively involved in your business from writing a marketing plan to taking the company through a flotation on the stock market.

Business angels will invest across most industry sectors and stages of business development. They tend to generally look for the following within your business as a basis of whether to go ahead with an investment:

• The expertise and track record of the management

• Your businesses competitive edge or unique selling point

• The characteristics and growth potential of the market

• Compatibility between the management, business proposal and their skills and investment preferences

If you do decide to choose the help of a business angel within your business start-up funding then you must ensure that the angel you choose is right for your business needs. You should choose a business angel that is best suited to the needs of your business.

It is also important to keep in mind that business angels tend to mainly invest locally and within a specialised area.

By: Helen Cox

Business Angels and the Capital That You Need

admin — Mon, 17 Aug 2009 04:35:48 +0000

Business angels are high net worth individuals; they form another way of gaining finance for businesses. Business angels form part of what is known as equity finance. This equity finance is money that is invested into a business that doesn’t need to be repaid. Business angels are one of the most popular forms of equity finance and in recent years more and more people are realising the benefits of using the help of a business angel.

Business angels are established entrepreneurs who have already built up their own business. They are typically men over the age of 35 but there are no strict guidelines as to who can and cannot become a business angel. The majority of these business angels make investments for financial reasons; however in many cases there are often other factors as to why business angels wish to make a contribution to a business. These reasons include things such as they wish to take part in the entrepreneurial process and to have the enjoyment of being part of a successful investment.

It has been estimated that business angels invest roughly £300 million every year into established and start-up businesses. It is also safe to say that the majority of these investments happen at the start-up stage of business rather than later on in business. Typically, Business Angels invest between £10,000 and £750,000 in an investment. Where larger amounts are invested in a business, this may be as part of a syndicate organised through personal contacts or a Business Angel Network.

When it comes to the type of business that business angels invest in it should be noted that business angels invest across most industry sectors and stages of business development; however many business angels especially invest in early and expansion stage businesses. Most business angels prefer to invest in companies within 100 miles of where they live or work. Investors in technology companies tend to be more prepared to travel longer distances. One thing that is certain is that business angels rarely have a connection with a company before they invest but they will often have experience of the industry sector that they will be getting involved with.

If you are either a start-up business who needs start-up finance or you are an established business who needs extra finance for a specific purpose then a business angel could be just what you are looking for. A business angel can bring not only money to a business but by using the help of a business angel you are also gaining help in the form of experience, contacts and additional skills to a company.

Not all businesses are often able to gain the help of a business angel. Your business/company has to have a decent history and you need to prove that you will be able to establish yourself. There are certain aspects that business angels will look at within your business to determine whether you are eligible to gain the help of a business angel. These aspects are things such as:

• The expertise and track record of the business founders and management team

• The competitive edge or unique selling point of the company

• The characteristics and growth potential of the market your business is in

• Compatibility between the management, business proposal and the business angel’s skills and investment preferences

• The financial commitment of the entrepreneur

If you are interested in gaining the help of a business angel it is important that you get in touch with a financial company who will be able to put you in touch with a business angel who will be able to possibly help your business.

By: Helen Cox

I Want To Start My Own Restaurant Business But What Finance Options Do I Have?

admin — Sun, 09 Aug 2009 00:24:33 +0000

So you want to start your own restaurant business but your worried you can’t raise the finance you need to set your business up, if so this article is for you. I will cover the different options that you may want to think about where you can get finance for your new restaurant business, the following are: -

· Your friends and family – you may think this is the best option if they have the finance available for you, but you have to remember they will only have a certain amount of money available and proberly wouldn’t be able to give you more if you ran into trouble and also you may feel bad not being able to repay them as quickly as you thought you might be able to, as making a profit in a business can take a good year or even more. You will also have to discuss what interest you would give them, all this may cause problems with your relationships with the person or persons is it worth it, give it a thought.

· Your savings – if you have a good amount of savings you may be able to use them for your new restaurant business, it depends on the amount you have saved. This amount may run out quickly and if it does you would have to have a plan b in which you could get finance from elsewhere.

· Credit Cards – they offer you money to buy items but if you wanted cash from these they usually charge a daily interest rate for this. Credit cards also have a maximum limit on these depending on your credit history this might be only £3,500 and this wouldn’t get you far in setting up your business so you would have to take out more than one card, but also you have to pay a minimum amount every month and when your setting your business up and have no income coming up you may not be able to afford the minimum payments every month.

· Home Equity – using your home as equity can be a very risky, what happens if your business doesn’t work out the way you think it would and you couldn’t pay bills etc. your house may be taken away from you leaving you with no house to live in, you need to seriously think this one through is it worth the risk?

· Bank Loans – you may be able to take out a bank loan if you have a good credit history, the amount you may be given is up to this and therefore it could be a few thousand pounds but it could be a lot more like fifty thousands pounds. Interest would be calculated every month and it depends on the company on how high this may be.

· Angels Investors – business angels can give you from twenty five thousand to up to two hundred thousand pounds depending on how many angels group together if this is possible for your business. The angel or angels will provide financial backing for you at the correct time and will give you advice but won’t be involved in the running of the restaurant on a daily basis. Be prepared as they will want a good stake of the company so they can get the money back they invested and more, but they can be very helpful as they may have done the same or similar to you only a few years ago and made a success of their business enabling them to help others out.

· Venture Capitalists – they provide financial backing for your new restaurant business but also help you sort out how to run the restaurant and help make important decisions etc. They will also want a good return for their investment like the business angels.

All of the above are options available to most people and I’m sure whatever circumstances you’re in you will find appropriate funding for your restaurant business.

By: Jene Pedder

Financing a New Business with Home Equity

admin — Sat, 18 Jul 2009 14:55:32 +0000

If a small business owner owns their home, they can tap a the equity that they have built in there home in order to finance their new business. The entrepreneur would visit the bank that holds their mortgage to discuss the option with their banker of freeing up some of the monies that they have in their home. Often the home owner can access 70% of the equity that they have built up, and in some cases, they can access up to 90% of their home equity.

Home equity financing is advantageous over other forms of small business funding for a number of reasons. The interest rate on a home equity loan or line of credit is far less than credit cards. The interest that the small business owner pays on the loan is tax deductible. Repayment terms are spread out and maybe somewhat flexible and almost anybody who owns a house has access to that money built up in their home equity. Lenders are much more comfortable with approving a loan secured against a cash asset that the applicant has already built up so the small business owner with equity in their home stands a much better chance of success pursuing this route.

The small business owner does have to be very vigilant with this type of financing as they must consider if they are in an inflated real-estate market or not. If there is a real-estate bubble in the neighborhood their house is in, their home could have an extraordinarily high appraisal value. This appraisal will be the basis on which the home equity lender will determine how much they can lend out. The higher the value, the more money will be available to the borrower. In the current low interest rate environment that we are in today, borrowers can get a lot of money for a low rate. But if that rate should move up fairly quickly, it can become very difficult to pay back the loan. But with careful planning and consideration of the risks involved with borrowing money against home equity, the small business entrepreneur can have ready access to the money they have built into their homes.

By: Ken Bissonette

Small Business Finance the Smart Way

admin — Fri, 03 Jul 2009 10:57:59 +0000

Are you a small business owner? If you are, you’ll know that running a small business is one of the most difficult things you’ll ever do in your life. You’re the company’s spokesperson, owner, founder, advertiser and investor. You are its inspiration. It is your livelihood and your passion. And like all passions it is all consuming.

It has you crunching numbers when you should be sleeping. It has you sketching out ideas on napkins in restaurants when you should be eating. But like any love affair the irritations are worth it. You know that almost nothing in your life can match the highs that your business gives you. So stick with it! Give your business all your heart and soul. But be sensible when it comes to your cash.

Business Finance.

Starting your business can be incredibly costly. Buying the machinery, renting the premises, purchasing the advertising space… well you get the picture, you’ve been there. You are also probably aware that the cost of kicking your business into life is so high it can affect your businesses ability to grow later on down the line.

You’ve established yourself as a great business; you know you have the ability to expand and to grow. But you just don’t have the cash to do it. But what is the best way to get that much needed cash injection? You don’t want to be taken for a ride. This is why you need to know about business finance.

Small Business Cost.

The first thing to do when you start investigating small business finance is to look carefully at what you want to achieve. Having clear goals is one of the basic rules of success in business. If you are going to borrow money to support your business you must have a clear aim in mind. That way you can easily track the success of any investment and see how much, making your small business grow will cost. So, determine what you want. Are you purchasing assets, such as land or machinery, or stock? Or are you looking to improve your market position through advertising, or expand into new markets? Whatever you’re doing be clear about your goals.

Small Business Finance.

There are two types of small business finance available to you. The first is the more traditional and common form, known as ‘debt finance’. This involves your company lending money from a financial institution, usually your bank. There are up sides to this deal, you get your cash and you keep all your business. You do have to pay more back than you borrowed in the first place, with the onus on you to repay as soon as possible.

However, if you have clearly identified a use for your money this should present no problem to you and allow you to expand quickly. This is why it is the route taken by the majority of small businesses. If you fail to pay back the money you have borrowed however the consequences are severe, as part of the agreement will involve collateral. Often, this could be your house.

A less common option is that of ‘equity finance’. Ever seen the TV show Dragon’s Den? Then you’ll know what I’m talking about. Equity finance is when an investor gives you the cash you need and in return you give him a share, or a stake of your business. As the investor has no assurances, unlike the bank, he or she requires a much greater pay off if things go well. They want some of those profits! However if things don’t work out, you won’t be sleeping in the streets!

Your Future.

So there are plenty of ways you can offset your small business cost. Small business finance is easy to get if you pitch correctly and your business is heading in the right direction. Whichever mode of business finance you choose make sure you keep following the dream and your passion might end up making you millions.

By: George Butler