Ensuring that your business has an effective funding solution is key to your business success. Before you can do anything with your business you need the finance to be able to fulfil your business needs. So how do you go about gaining the business finance that you need?
There are many avenues that you can approach when it comes to gaining your start up business finance such as bank loans, investors and credit cards as well as overdrafts; however in order to gain any form of business finance you need a well thought out and structured business plan. On the other hand there are occasions when you may have a viable business plan but you are still struggling to get finance in order to expand or start up your business; this is where a Small Firms Loan Guarantee can help.
Small Firms Loan Guarantee is also known as SFLG and is a joint venture between the Department for Business, Enterprise and Regulatory Reform (BERR) as well as a number of participating lenders. An SFLG was put in place for people who have tried and failed to get a conventional loan. They are available for most types of businesses and business purposes but it should be noted that there are still some restrictions and exclusions, which is why it is important that you check these against your business before making an application for a SFLG; this can be said for any form of finance. You should check that your business is able to apply before applying for any form of finance to save yourself time, money and effort.
A Small Firms Loan Guarantee is most suited for small to medium businesses that have trouble trying to gain a conventional loan. They are extremely helpful to small and medium businesses as you won't have to offer assets as security. But before you apply for a SFLG you should take a good look at your business and carefully think about the needs of your business. When doing this you should keep questions such as the following in mind:
o What is the money needed for?
o How much money do you need for your business?
o Have you investigated all of the forms of finance that are available to you?
I suppose you are now wondering what exactly a Small Firms Loan Guarantee offers you, well the main features and criteria of a SFLG are as follows:
o A guarantee to the lender covering 75% of the loan amount, for which the borrower pays a 2% premium on the outstanding balance of the loan, payable to BERR
o The ability to guarantee loans of up to £250,000 and with terms of up to ten years
o Availability to qualifying UK businesses with an annual turnover of up to £5.6million
o Availability to businesses in most sectors and for most business purposes, although there are some restrictions
So if you are a small to medium business in need of finance then keep the idea of a Small Firms Loan Guarantee in mind, you never no it could be just what you are looking for.