5 Investment & Lending Schemes You Should Take Advantage Of

Business colleagues looking at ipad, whist other colleagues sat around meeting table

When running a business, you need to make the most of your finances.

But sometimes, it can be hard because you may not have the funding to hand to actually see you through it. There are ways you can get through it, just like you would in your personal life. When facing a financial emergency, you may look at the best payday loans in the UK, but when running a business, this option might not be available. So, if you want to know what investment and lending schemes you can take advantage of, keep reading and discover the top 5 that you can utilise! 

1. Bank Loans

Bank business loans are one of the most common types of lending schemes that you can use, and for a good reason. You’ll be able to receive a lump sum of cash that can be used however you like, and really help bring your business up from the ground. You’ll find special interest rates with these type of bank loans too, as they’ll be designed for businesses and will take into account your varying situations. Some loans will also have flexible terms, allowing you to pay more when you’re busy and less when you’re quiet. This helps you to stay on top of your repayments no matter how much or little profit you’re bringing in. So, if you’re thinking about taking out a business bank loan, be sure to speak with your local branches and see what they can offer you. 

2. Investors

Investors can be a fantastic way to support your business, and they can really help you to strengthen your operations. Most investors will provide you with the cash that you need in exchange for equity in your business. This helps you to get the financial support that you need and also provide you with some extra knowledge in the running of your business. Normally, investors will have had their own businesses and will have collected a lot of knowledge that they can pass on to you. So, not only will you have extra cash, but you’ll also have a mentor behind you to help guide you to success. With equity investing, you do still need to be aware that you will lose some ownership of your business. This means you’ll need to run decisions past the investors so that they can agree to things too. As long as you’re happy with that, opting for an investor can be the best way to go.  

3. Recovery Loan Scheme

There’s something called a Recovery Loan Scheme (RLS) that was created to help UK businesses stay afloat. It allows a business to borrow a value of up to £2million, showing just how well much this scheme can do to help you. The RLS is also a range of products, and includes loans, overdrafts, and even asset finance. The terms are often anywhere from 3 months to 3 years, and you might be able to access multiple products within the one scheme. There is also a guarantee to the lender that the government will back 70% against the outstanding balance, although the borrower is still reliable for the entire debt amount. You do need to have a turnover of less than £45million and be based in the UK. So, make sure you can meet all the criteria before looking to apply. 

4. Government Grants

Government grants can be a fantastic way to enhance your business without getting into debt. There are lots of them available, and there are even some that are specific to certain counties. Government grants allow you to have access to the funds that you need without increase your business’s debt, and they can really help you to boost your finances. You may be able to reapply for government grants again to renew them, but this isn’t always the case so be sure to check first. So, whether you’re a brand new entrepreneur or small business trying to get off the ground running, don’t overlook government grants as they can be a huge help. 

5. Business Overdrafts

Business overdrafts are one type of lending scheme that your business might benefit from too. By using an overdraft, you’re in control of how much debt you get into. You’ll have an agreed limit and then you’ll be able to get as close to it as you need. This type of flexible borrowing works really well when you don’t need a huge lump sum but need a little something extra to see you through. You’ll also only pay interest on what you actually borrow, making it a lot less debt in the long run. You will need to have a business bank account and be eligible based on your affordability, but most banks will be open to providing you with one.

Securing funding for your business takes time and research as you need to ensure you’re choosing the right one for you. These 5 different types of investment and lending schemes can be just the thing you need and could elevate your business to the next level. So, if you’re wanting to see a change in your road to success, why not try out one of these 5 and see if they can make the journey a bit less bumpy! 

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