The Banks aren’t lending – are you sure about that?

Posted by Darren Wingfield 04 April 2014 02:11 PM

Wherever you look there is a strong message around that the banks just aren’t lending to businesses. In my experience of working with new and early stage businesses the fact is that the finance is there, in abundance.

As partners in Virgin Start-Up we can help pre-start businesses and businesses up to 1 year of trading to access loans at the competitive rate of 6% which is sometimes all that they need. Interestingly, a wide range of high street banks are matching the start-up loans where there is a robust business case, giving a solid financial platform with all-important additional advice and mentoring to support it.

Finding the right financing package for your business will carry you through any temporary difficulties as well as allowing you to make the most of any opportunities to grow. There are several ways to gain access to different kinds of funding for any budding entrepreneur but first you need to be clear on what it is your business needs and know it detail how the money will be spent and when.

Business finance is subjective and differs from case to case, the following points will provide business start-ups and early stage businesses with a solid base on which to expand and explore resulting in the right financial package for your business.

Obviously it’s important to know how much money you will need and how it will be distributed to each aspect of your business, to know this you will need to draw up a budget based on your business plan.

Your budget should show your sales forecast, expenditure and most importantly, cash position for each month. It is important to remember not to get carried away with sales forecasts, by making over optimistic sales forecasts you run the risk of sales turning out lower than expected which will cause delays in payment and increase your costs.

It’s not unusual for a start up business to spend more than it earns for the initial two or three years, so the amount of financing needed during this time may continue to increase throughout this period.

We can help you to access the low cost Virgin Start Up loan during the critical first year of trading.

This increase in financing could be for a number of reasons; some businesses have seasonal sales patterns that lead to predictable cash flow highs and lows, you may be looking to increase your marketing or build a new website. Perhaps you need more equipment to allow you to take on more work. You should allow for some contingency funding, to do this consider any worst-case scenarios to help you to decide how much money you should have readily available if needed.

The amount of contingency funding you’ll need is in direct correlation with the accuracy of your sales forecast – the less clear you are of its accuracy the more contingency funding you’ll need Working out the right finance plan for your business can feel daunting if you’re going into business for the first time.

Similarly in the vital first year of trading you may encounter unexpected expenditure or require help to expand.

Remember there is a lot of help available and TEDCO’s Ready for Business team can help you to tailor the right package for your business offering you the very best chance of success.

To find out how a Virgin StartUp loan could help your business call: 0191 516 6102 or email:

Topics: Raising Finance Business Start Up Business Owner