Small business lending and start-up support – what you need to know

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Small business lending and start-up support – what you need to know

Working for yourself is a big step, and although you may have great ideas and high hopes for your business you will need the right advice and support behind you to make them come true.

If you are a start-up or small business trying to scale, there are more tools at your disposal than ever. You can employ one of many strategies including growing customers, raising equity, acquisition of another business in your industry or build a partnership network. You can also borrow money, and if you opt to take this route there are some things to know that will increase the likelihood that a lender will provide you with funding.

It’s a numbers game

The fist step is to organise and prepare the required financial documentation that any lender will ask for, irrespective of anything else. This includes three years of personal and business tax returns, balance sheet and income statement along with a schedule of current debt and liabilities. You will also likely need a personal financial statement and current annual financials including a balance sheet and income statement, and a current accounts receivable report.

It is also wise to include a 1-3 year projection of finance that assumes the funding is granted. The key point to remember is that the lender is effectively taking a risk when providing small business capital, so the idea is to reassure your historical financial management and competency whilst forecasting the flow of finances to indicate to the lender how they will be repaid.
Cash (flow) is King

A lender will often consider hard assets as a counterweight for a loan amount (property, machinery etc). But most prominently they will want to understand your monthly cash flow, or in other words how much your customers pay monthly for your goods/services. A lender will compare the cash flow against monthly expense to check that your cash flow exceeds monthly expenses and therefore you have stability.

In reality, if you are seeking a loan you are most likely to be suffering a cash flow problem. Lender funding is a great way to bridge such periods. But the better your cash flow, the greater the chances a bank will lend you money. If sales are slow or you suffered an extreme loss, your accounts receivable report will tell the story of what the next few months will look like.

Your local branch

Remember that the bigger banking institutions are risk-averse and therefore are inclined to avoid supporting the volatility of small business. They are great for integrating payroll and user experience on their well-funded banking platforms but may not be the best choice for supporting your funding needs. Think local and be well prepared with your documentation and your chances of success are greatly increased!
Aside from funding, if you are running your own business then there are a whole host of other implications. These cover taxes such as VAT and National Insurance and, where you employ other people, employment law legislation that is increasing in complexity day-by-day.

Marden & Co is on hand to help. Our professional services for start-ups and the self-employed will ensure you are fully compliant with the law and have all the advice and support you need. So if you are looking for professional support in starting or scaling your small business then you can find out more information here or for a no-obligation consultation call us on 01737 851 761 or email

We’re hear to help you win with your business ventures.