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Aspiring entrepreneurs put off by financial risks… but they don’t have to be

20/04/2017 / Comments 0

Aspiring entrepreneurs put off by financial risks

More than half of Brits who consider setting up their own business are put off by the financial risks associated with it, according to new research.

The study of more than 1,000 people found that four in five have considered setting up their own business, yet 54% said their financial concerns were enough to deter them from doing so.

A further 40% were put off by a fear of failure, while 28% said the current economic instability is one of the biggest hurdles they would have to overcome.

A question of funding

As exciting a time as starting a new business can be, there are a number of quite significant challenges that must be overcome in order to get off the ground and flourish.

Last year, Ormsby Street’s analysis of data from the Office for National Statistics found that although 91% of new businesses are still trading after one year, only four in 10 go on to reach their fifth birthday.

Often, it is the same few questions that, if left unanswered, stop businesses from reaching this milestone.

While the entrepreneur’s appetite and the competition within the industry are two contributing factors behind a business’s longevity, perhaps the biggest one is cash flow.

It’s not just enough to have the money available to set up in the first place (often this is a challenge in itself – more on that later), but you also need to be able to sustain a strong cash flow so that money is readily available to pay suppliers and equipment, for instance, as and when it’s required.

This was true for one of our clients, who required a loan to help produce more stock in order to satisfy their growing demand. Read how we helped here.

Here are three of the most common reasons start-ups fail, and how you can improve your chances of success.

How to secure the funding that’s required

Although there’s perhaps more choice than ever when it comes to funding your business, this doesn’t always seem true when aspiring entrepreneurs begin the process of talking to the bank about raising start-up capital.

With no trading history behind you – just a great idea and a business plan – it can be difficult to convince the bank to invest in your company.

Yet, with the rise of crowdfunding and peer-to-peer lending for example, start-ups really do have a few avenues to explore to secure the funding they need to grow.

To help start-ups polish their business model and find the right finance facility for their business, we’ve produced The Ultimate Guide to Business Finance For Start-Ups, which is available here to download for free.

If you’re thinking about setting up a new business but wondering where to turn for funding, we can help. As a commercial finance broker we’ve helped a number of start-ups to secure the facility they’ve required to flourish. To find out more, contact our team on 0800 9774833 or request a call back today.

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Some of the funders we work with

  • Skipton Business Finance
  • Close Brothers Invoice Finance
  • 4Syte
  • PNC Business Credit
  • ABN AMRO Commercial Finance
  • Haydock Finance Ltd
  • Secure Trust Bank
  • Pulse Cashflow Finance
  • Nucleus Commercial Finance
  • Boost Capital
  • Davenham Trade Finance
  • Innovation Finance
  • Catalyst Finance
  • Davenham Asset Finance
  • Ultimate Finance Group
  • Shawbrook Business Credit
  • Aldermore Invoice Finance
  • Barclays
  • Metro Bank SME Finance
  • Team Factors
  • Market Invoice
  • InvoCap
  • Giant
  • Trade Finance Partners
  • 1pm
  • Asset Advantage
  • Regency Factors
  • GapCap Cashflow Finance
  • Royal Bank of Scotland
  • Woodsford Tradebridge
  • IGF Invoice Finance
  • Merchant Money
  • Santander Corporate & Commercial
  • Partnership Invoice Finance
  • Lloyds Bank Commercial Finance
  • Investec
  • Calverton Finance
  • Leumi ABL
  • Roma Finance
  • iwoca
  • Positive Cashflow Finance
  • Bibby Financial Services
  • Creative Capital
  • Spotcap

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