Does your businesses need more cash? Finding funding can be hard in the current climate. But there are more options than just asking the bank.

Recent figures from the Bank of England show that UK banks and building society lending fell by around £4 billion. And small businesses have access to fewer funding sources. But it’s not all bad news. There are possible sources of funding to help get your cash flowing.

Business angels

If you’re looking for investment of between £10,000 and £750,000, a business angel might be able to help. They are individuals or syndicates who invest their own money in your business.

The government has also launched the Business Angel Co-Investment Fund. This makes initial equity investments of between £100,000 and £1 million alongside angel syndicates.

If you are interested, make sure you have a lawyer, an advisor and a full business plan.

Venture Capitalists

Need more money than a business angel can provide? A venture capitalist might be right for you. Is your business:

• High-growth, looking to float on the stock market or be sold
• Planning to sell a unique product or service
• Realistic about its cash flow requirements
• Capable of setting up and managing financial controls

If you meet all these requirements, then this might be the way to go.

Crowdfunding

This is a flexible way of raising funds and suitable for lower investment levels. Normally done online, it allows a number of individuals to invest a smaller amount of money. Together, these investments help you reach your funding target.

There’s lots of sites out there, so take time to research the right one for you.

Government schemes

Enterprise Investment Scheme (EIS)

Helps small businesses raise finance by offering tax advantages to new investors (e.g. 30% income tax relief on the cost of shares).

Conditions apply for your business and the investor. Find out more on the HMRC website

Seed Enterprise Investment Scheme

This scheme provides 50% income tax relief to individuals who invest in shares in qualifying companies. There’s a limit of £100,000 a year for individuals and £150,000 a year for companies. Visit the HMRC website for information 

Enterprise Finance Guarantee (EFG)

Do you have an annual turnover of up to £44 million? Are you looking to borrow between £1,000 and £1 million repaid within 3 months to 10 years? If so, you might be able to use this is a loan guarantee scheme.

The government provides 75% guarantee on each individual loan, subject to certain conditions. Read more about the EFG on the government website

Enterprise Capital Fund (ECF)

These combine government funding with private sector investment. They aim to help businesses that have investment potential but struggle to get investment from venture capitalists or other sources. See if the ECF could be right for your business 

National Loan Guarantee Scheme (NLGS)

This scheme helps businesses access cheaper finance by reducing the cost of bank loans by 1 percentage point. The government guarantees the unsecured borrowing by banks, who pass on the savings to you as a loan at a cheaper rate. Get a list of participating banks 

Do you have experience of any of these schemes? Or have you managed to get funding from another source? Share your advice with other SageCover customers in the comments below.