Business Finance – What are the Options?

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You have a great business. You started it yourself and are very proud of it. You think about it constantly. You lie awake at night and plan ways to make it better. Holidays aren’t what they used to be. You fantasise of making millions. But you also worry about the bills, about what the future holds. How are you going to afford that vital piece of kit or that new key hire? And why’s that VAT bill so massive?

It’s hard out there in the real world. It’s lonely and it’s scary and anxieties over all those trivial issues chafe at the possibility, at the thrill that one day it might be your name up in lights and splashed all over the papers.

But starting a business is the easy part. You had an idea, perhaps some experience, and once you’d scratched together the necessary funding off you went. You made mistakes – everyone does – but you’ve made it work. And now you’ve got to the part where you want to take it to the next level, to see your baby become a grown up, but you haven’t got the money. Or the expertise. Or the time. So what on earth do you do?

Whatever your industry, whatever your background, whatever good or service you make or sell, nearly every CEO or MD will one day have to face the fact that you can’t get to the top without outside help. And we’re not talking about simply phoning the bank for a loan or overdraft to help buy that new machine, finance that new site or purchase that business down the road you’ve always had your eye on. Banks are still out there, but all too often what you need or want to do is beyond the reach of the average bank.

But what happens now? You don’t know – and that’s part of the problem. People you know, people you trust, have told you the scare stories – how investors rip your eyes out, how they’ll snatch your business from under your nose. You’re in this game to be your own boss, to get away from other people. So why would you want them meddling now?

And even if you could stomach the intrusion, how would you go about it all? How could you be sure to get a good deal, to find the right partner? What does the whole thing cost? What will you have to sacrifice? Is it equity you’re after or some form of debt? Google is full of ideas but how much of it can you really rely on? And will it get you where you want to be?

The truth is this – there is no one-size-fits-all solution. Since the Lehman collapse a bewildering array of investors and a flood of money have entered the market, all looking for SME-shaped homes, and this has made it all the more confusing. What’s worse is that it’s harder than you might think to spend all this money. Finance comes with its own restraints, rules and restrictions whereas businesses are multi-faceted, face specific issues and are often very different from each other. All too often those who have the money and those who need it never meet in the middle, stuck in an impasse with no clear way out.

So what should you do?

Whether you’re doing this for the first time or you’re an old hand who knows all the answers, third party professional advice can be indispensable. And this advice doesn’t have to be expensive; it shouldn’t be for free but for a period of consultation it should cost you less than you’d be paying your lawyer. Furthermore the adviser should first be able to understand your specific issues and then put the different solutions on the table. Solutions will depend on a number of factors, such as how much money you feel you need, your industry dynamics, the current structure of your business and where you draw your own red lines.

At Nash & Co Capital Ltd we advise a wide range of businesses across the UK, from aviation service companies to outdoor advertisers, petrol stations, plant hire operators and restaurants. What most of our businesses have in common, however, is that they are privately owned, still controlled by their founders and are in need of some form of financing solution – whether they are for sale, looking to grow or seeking to acquire another business. Like you we are an owner-managed business, meaning we face many of the same issues you do – how to expand, whom to employ, how to pay the VAT bill and so on. Hence we are well versed in designing solutions and working with investors to ensure that we meet a company’s specific needs and not simply ramming the squarest of pegs into the roundest of holes.

Last but not least, while much of the funding we source comes from institutions or individual people outside our organisation, we also have the ability to invest ourselves in the businesses we like. We do that both with our own resources and that of Nash & Co, ensuring that our relationship continues into the medium term and further beyond. Since 2016 we have made six such investments and hope to make many more. Having our own money on the line means that we understand your needs better and will provide on-going support over a number of years.