High Street Banks Are Refusing To Lend To New Businesses: Here’s How They’re Combating The Situation
Since the onset of the global financial downturn, most high street banking groups have had to change the way they do business. Lloyds and other big names came under lots of scrutinies for lending money to people who couldn’t afford the repayment schedule. They also got a lot of flack for releasing capital for new business ventures without properly researching the markets. Those are the main reasons new entrepreneurs have trouble getting the funds they need for new concepts. While it is still possible to get a business loan from the bank, you have to work a little harder these days. Also, no high street chain is going to take a punt on any concept with less than an 80% chance of success. Business owners across the world now have to think outside of the box when starting a new company.
There are many different ways of getting your idea off the ground without receiving funds from the bank. We’ve spent the last few days contacting business people and asking them how they’ve managed to stay afloat. We also found out how they realise their goals without a major financial injection. Thankfully, we got hold of some good information that we hope will benefit you in the near future. As the old saying goes, “where there is a will, there is a way.”
Private equity firms
Private equity firms work in much the same way as high street banks when it comes to making investments in new business. All you have to do is arrange a meeting to pitch your idea, present representatives with your business plan and hope they see its worth. The only thing you have to watch out for with private equity firms is the percentage of your company they will require for the investment. For that reason, you need to work on your negotiation skills before sitting down and promoting your concept. At the end of the day, it all comes down to how well you can sell the idea. Market research is essential if you want to secure a substantial investment.
Another great way of combatting the high street bank situation is to use your savings to fund a new business idea. Some of the company bosses we got in touch with even decided to remortgage their homes to help pay for their startup. You could also ask family members and friends for financial assistance. While that might not be the best way of getting the money you require, sometimes there is no other option. When all’s said and done, if you’re not confident enough to spend your savings, no one else will be confident enough to invest. In that case, it might be wise to go back to the drawing board.
Depending on the nature of your new company, there may be numerous business grants you could apply for. Most of them come from the government, but there are some private firms that offer this service with a view to promoting innovation. A significant number of eco-businesses have used this technique to stay ahead in 2014.
Over the last five years, crowdfunding websites have become very popular. These sites are used by people with ideas to get the funding they need. You’d have better luck if your business concept were designed to help society in some way rather than just lining your pockets. With that in mind, you need to think about the way in which you present your concept. For instance, someone starting an online marketing company might like to push the idea that doing everything online limits the use of paper and thus saves the planet. You get the picture, right? Just be creative.
Running a business from home
One of the main expenses new business owners have to deal with is rent. If it is possible for you to work from home and run your company without the use of commercial premises, which could take some of the financial strain away. Sure, your family will be a little annoyed that you’ve commandeered the dining room for most of the day, but they will be supportive once they see how much money you’re making. Just be aware that you might need to pay for assessments on your workspace to ensure you comply with the law. That is only necessary for certain types of businesses, but you need to check to find out if it applies to you.
Outsourcing as much as possible
Hiring staff to help with your operations can be extremely expensive. It can also mean you have to pay wages when there isn’t enough work to keep everyone busy. For that reason, you must try to outsource as much as possible. You simply won’t have enough hours in the day to answer phone calls and deal with correspondence, and so it’s best to leave that job to the professionals. No matter what type of task you need them to perform, there will be a suitable outsourcing specialist out there somewhere. All you have to do is search online for one that provides the services you require.
Rent a desirable business address
You might not realise this, but there are lots of firms that provide virtual office packages. A quick Google search with throw up lots of results that you might find interesting. A virtual office company will be in the best position to give you a professional-looking address for your business. That can help you to attract more customers and clients. It can also assist you in impressing your target market. As most virtual office addresses are located in the capital, you will present an image of success from day one.
From all that information, it should be obvious that entrepreneurs can still get the capital they need without the help of high street banking groups. It’s all about remaining innovative and looking for viable alternatives. If you’re looking to start a new company over the next few months, you will do well to take note of the advice in this post. The methods above are currently working for lots of people all around the world. So, there’s no reason they shouldn’t work for you too!