Guide

Non-bank finance

Obtaining non-bank investment

Before approaching a non-bank investor, you should make sure your business is investment ready by:

  • keeping yourself well informed about your business finances
  • having an up-to-date business plan
  • being clear about the amount of money you require and what it will be used for
  • carrying out market research to demonstrate that there's a market for the products or services that you intend to sell
  • producing cash flow projections for the next 12 months to show that you will be able to afford repayments, including interest and fees
  • carrying out a SWOT analysis (strengths, weaknesses, opportunities and threats relating to your business)
  • ensuring your business and personal credit ratings are up to date and error-free

For more information, see measure performance and set targets.

Getting the best deal

When looking for finance for your business, it is important that you choose the option that best suits your business - see business financing options - an overview.

You should compare different providers of non-bank finance - if necessary using a finance broker - and always read and research the small print of any investment offers.

Loan guarantees

Most non-bank lenders will ask you for some form of guarantee before granting a loan. This could include assets such as property owned by the business. You may also be required to ask another person or another business to act as a guarantor and guarantee the loan. The guarantee means that the lender will claim from the guarantor if your business cannot meet the repayments.

Some lenders will also require personal guarantees - eg from your board of directors or business backers.

Many loan providers require you to take out loan repayment insurance to cover repayments if your business meets cashflow problems.

For more information, see providing a guarantee for your loan.

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