Brexit has brought with it many uncertainties for small businesses, which includes the potential for funding to be at risk. However, there is a widespread of alternative funding available and now is the time for you to start considering which would be your most suitable option. The funding options we've considered fall into two categories: how to access finances without relying on your bank and funding that is export-specific.
If you’re feeling uncertain about your finances post-Brexit, we’ve found that helping hand to give you the funding support you need. Below, we’ll check out how to get the funding without relying on your bank.
- Peer to Peer (P2P) Lending: P2P is ideal for small businesses, as it is a direct finance transaction between savers (individuals who are willing to provide the money) and you. The three largest platforms are: Funding Circle, RateSetter, and Zopa. Your funding is protected by the UK trade body (P2P Finance Association) which regulates these transactions. The P2P Finance Association covers 90% of peer-to-peer lending, including the top 3 platforms. To check if you have access to this protection, check out their members here.
- Crowd Funding: This is similar to P2P as it focuses on individuals supporting you, rather than an institution. You would raise the funds by encouraging a large number of people to support your project and give equity in exchange. There is an A-Z directory available for crowd funding platforms, which can be accessed here.
- Business Enterprise Fund: This scheme is a good alternative to bank funding, as you’ll be given the benefit of the doubt, no matter what your track record of credit rating is. This lender is invested in taking the gamble which a bank might refuse, as they like to provide small businesses with the support to expand. You can feel at ease with this funding, as there are investment managers on board eager to help you with the process of securing a loan.
- The Key Fund: This fund is built upon community. After you’ve applied for the fund, they’ll take you under their wing and discuss your application – ideal if you want a friendly, personal approach, a usual antonym to finance tasks. It is available to businesses that have a social or environmental aim.
Even with Brexit, there are options available for support. Whether you’re simply looking for alternatives to bank funding, or need export-specific help, there is someone on the side-lines for you to lean on. For exporting, that someone is the UK Export Finance: a home to numerous schemes that are available to you, no matter the size of your business or the goods you are exporting.
In our post-Brexit e-book, exporting advice is all about exploring and expanding. Remember that there are possibilities outside of the EU, waiting to be conquered. If you’re eager to grasp onto that and establish your business, then the schemes provided by the UK Export Finance will allow you to be capable and ready for new overseas contracts:
- Bond Support Scheme: the benefits of this scheme are that the government promises the bank to cover the amount due to it if you are unable to reimburse them; and there is no maximum or minimum term for a guarantee.
- Export Working Capital Scheme: A scheme that will allow you to have access to working capital finance in relation to certain export contracts. Like the Bond Support Scheme, the government provides partial guarantees to lenders to cover any credit risks.
- Export Insurance Policy: covers the risk of not being paid under an export contract when you have fulfilled your contractual obligations. You will receive up to 95% cover.
You are eligible to the UK Export Finance schemes if: your business is based in the UK, your contract is with a buyer based outside the UK, and the contract has a minimum of 20% UK content. There may be more eligibility rules – see the UK Export Finance website for further advice