Get ready for funding
Funding is key for a healthy, growing business. A recent report from British Business Bank found that 1 in 5 SMEs were considering applying for external finance – looking for funding outside your business - in the next 12 months.
If you’re one of those businesses, you’ll need to get prepared before speaking to lenders. Our guide aims to help.
Decide on type of funding
There are lots of different types of funding. The best option for you will depend on what you’ll use the money for, and if you need it in the short term or for longer.
If you’ve not thought about this yet then our How to fund your business article can help.
Make sure you’re using a business bank account
It’s estimated that as many as 75% of the UK’s self-employed workforce use personal bank accounts for all their business transactions. But there are lots of benefits to using a dedicated business bank account. A business account can help you build or maintain a good credit profile and makes it easier to track your business income and expenses. Both of which will help you get funding.
Update your business plan
You’ll need to submit your business plan as part of applying for certain types of lending. Even if you don’t need to submit your plan, it’s a good idea to review and update it so you can confidently talk about your business and how you’ll use the funding.
Our Start up toolkit has a handy checklist of what you need to include in your business plan.
If you’re applying for equity finance – looking for investors – you’ll also need a pitch deck. British Business Bank’s guide to a good pitch deck can help.
Get your financial records ready
You’ll need to know your numbers. Make sure you’ve got the following up to date:
- profit and loss statement
- balance sheet
- cash flow forecast.
Check your credit score
Lenders will complete credit checks as part of the application process. If you’re a sole trader or partnership they’ll check your personal credit score. For other business set ups it’ll be your business credit score. This will help them decide if they’re happy to lend to you, and the terms of lending.
It’s a good idea to check your credit score yourself before you apply. If there are any errors on your credit or payment history you can get them corrected. Or if you have a low score you can look to improve it before you apply.
Read our business credit score article for help.
More support
Review our range of borrowing and finance options
British Business Bank have lots of articles with more information on business finance. They also have a finance finder tool that can help you with potential finance options.
If business finances are a struggle for you at the moment please visit our support page
