What are the funding options for SME’s?

You’ve got a revolutionary business proposition, are building an excellent team and can see demand for your product or service increasing. But what’s stopping you from reaching your full potential as an SME? Many times, it’s money.

At CDI Alliance, we help small and medium upcoming business discover the obstacles standing in the way of growth and put plans in place to remove them. In our initial diagnosis, funding is very often an issue we uncover. Small business owners ask us “what are the funding options for SME’s?” In this article, we shed light on a few of the choices.

Grants

Grants are, in essence, free money. You receive investment without any obligation to pay it back. A fantastic option whereby you retain your freedom to run your business as you wish and shape your growth in the way you choose.

Even still, many SME’s do not even know they’re available. Grants perhaps seem a little bit too good to be true for a small business. However, it really is the case that you can gain significant investment with nothing to pay back. Be it for money towards purchasing new equipment or for covering some of the costs of training your team, it’s always worth searching for grants before looking for other funding.

There are a number of funding pots from which you can draw, both nationally and locally. These grants are there specifically to help your business grow so it’s worth checking with your local authority’s growth hub to see if there’s anything for you. Nationally, there are bodies such as Innovate UK who make grants available for SME’s, especially those they consider creative, innovative and forward-thinking.

The only downside to grants is the sometimes-lengthy application process. Filling in a form where you make a case for your costs being subsidised can take time that business owners struggle to find. That said, a few hours set aside to make your application and check it with your business coach is well worth the effort if it means securing interest-free investment.

Venture capital and business angels

It’s true that venture capital is sometimes a little daunting for start-ups and SME’s. You need confidence to call upon powerful organisations or individuals to help you fast track your growth plans. In exchange, they’ll require some form of payback. For this reason, you should always consult your accountant or a specialist adviser before entering into any commitment.

In addition to the funding, another upside to venture capitalists is that they often have years of business experience to share and a rich network of contacts. Should you be looking for a supplier, manufacturer or contractor, the right investor will likely be able to put your SME in touch- an additional benefit alongside their money.

If you’d like to explore the options of venture capital funding, we recommend you reach out to us at CDI Alliance and we can introduce you to a qualified specialist.

Crowdfunding

Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money. Traditionally, financing a business, project or venture involved asking a few people for large sums of money. Crowdfunding switches this idea around, using the internet to talk to thousands – if not millions – of potential funders.

How do you start a crowdfunding campaign? There are a number of popular websites that are easy to use such as Kickstarter, JustGiving and Crowdfunder.co.uk. Of course, you’ll need to tie in your crowdfunding with your marketing and social media activity to make sure as many potential supporters know the campaign is happening as possible. Remember, since it’s individuals who are contributing their cash, you’ll need a reasonable size crowd to secure the investment you need.

While grants, venture capital and crowdfunding are funding options we often find work well for SME’s, there are many other possibilities. Whatever funding you need, if you have a viable growth plan. there are many ways to secure it. Please contact us at CDI Alliance to discuss the best course of action for your business.