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Sunday, January 20, 2019

Businesses cash in on alternative finance

Do you own a business in need of finance?

Companies here have had to adjust to the reality that accessing finance from traditional lenders has become much more difficult since the financial crash ten years ago and the subsequent credit crunch.

And, due to the improvement in technology and surge in online banking, banks and building societies have continued to close branches across Northern Ireland.

As a result, small to medium sized businesses are finding it more difficult to access finance to enable them to grow.

Alternative finance is the solution to acquiring adequate funding. That’s according to Conor Walls, Managing Director at Exchange Accountants.

He said the financial world is constantly evolving, and he’s found that in recent years, the funding void left by traditional lenders has been filled by boutique funders and alternative finance.

“It’s certainly a service on the rise, and in recent months we have found ourselves working with clients to access alternative finance for a variety of needs, from loans in excess of £100,000 for long term investment through to funding for shorter term working capital requirements”, he said.

Businesses can access alternative financing through a variety of different forms, but most commonly it is secured via friends and family, Peer-to-Peer Lending, Angel Investors, Venture Capital Investors, Crowd Funding, Equity Finance, Invoice Financing and Asset Finance.

Funders will often have key criteria which must be satisfied before any finance is provided. Borrowers can expect to be required to explain what the growth potential of the business is and how the money is going to be used. They may also have to demonstrate how they will repay the cash.

Mr Walls said business owners must educate themselves on the pros and cons of each method of funding and ensure that they are as prepared as possible.

“We would definitely say that having a real understanding of what’s on offer is crucial to securing successful alternative financing, and I would advise every business owner to ask questions and consider their options,” said Mr Walls.

“At Exchange Accountants, we spend a lot of time working with our clients to help them secure the funding that suits their business needs. This ranges from identifying their value proposition, preparing profit and loss and cash flow projections to show funding requirements and, more importantly, the ability to repay any borrowings, through to preparing an application and meeting with a funder on their behalf,” he added.

He added that the key to successfully securing financing is to know what your requirements are and to arm yourself with the knowledge to identify the best deal for your business.

Established in 2011 with officers near Belfast city centre, Exchange Accountants provides accountancy services and tax advice to a wide variety of businesses and and individuals.


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