Sunday, October 25, 2009

Alternative sources for business finance

Having trouble finding business finance from the usual sources in recent months, despite having used top of the range business plan software have been a common phenomenon ammongst entrepreneurs. Business owners have increasingly had to be creative and with their efforts as many of the usual sources such as banks have tighten their purse strings and only provided finance to those with sufficient equity, water tight business plans and feasibility studies indicating high customer demand. The good news is that there is a wide range of options available – although your choice will depend upon the nature of the industry in which you operate.

Lets look at a few of the sources and strategies for finding business finding from various industries popular amongst entrepreneurs.


This sector has been particularly hit by the downturn. As a result of a significantly lower volume of work, many firms are struggling with cash flow problems. Similarly, the ever-increasing period between issuing an invoice and actually receiving payment can exacerbate these problems.
Invoice financing provides an efficient way of bridging the gap between doing the work and getting paid for it. This form of finance effectively allows you to borrow against the value of invoices you have raised, enabling you to secure funds almost immediately.

Under an invoice finance arrangement you will pass your invoices onto another company, known as a ‘factor’. This company will then advance you a portion of the value of your invoice; this is frequently as much as 90 per cent and can often happen within 24 hours.

The factor will then chase up payment of the invoice when it becomes due. When the invoice has been settled by your customer the factor will pay you the remaining value, less a small fee.

Invoice financing has become much more sophisticated of late. Many businesses rejected this form of funding in the past as there was a sense that customers would presume the company was in difficulties if it had engaged a factoring company. Today, though, invoice finance arrangements can be adapted to individual needs; any communication between the factor and your customers will appear as if it came directly from your company.

The problems faced by retailers are different to those endured by businesses operating in the construction sector. Stock is often one of the most significant assets held by a retail business – and yet, in a period of slowing consumer activity, it can be very difficult to translate stock into cash.

One of the most significant recent developments in the alternative funding market has been the growth of asset based lending (ABL). Asset based lending enables businesses to borrow against stock and other assets – and is therefore perfect for retailers.
ABL provides a flexible way of meeting the unique funding requirements of retailers and other businesses. Like invoice financing it is totally scalable, meaning that it will grow with your business. Asset based lending is used by businesses of every size.

Professional services
Providers in this sector have a unique conundrum. These individuals generally have no stock, and many do not have their own premises – working instead from their clients’ premises, or preferring to work from home or rented office space.

This can make it difficult to secure funding as there are no assets against which to secure a loan. However, if you are in this situation there are still forms of alternative funding that you should be able to access.

Invoice finance should be your first port of call if you are looking to secure funds quickly. The benefits are much the same as for those in the construction industry; this type of arrangement can provide you with up to 90 per cent of the face value of your invoices, as little as 24 hours after you raise them.

Comparator services can ensure that you find the right invoice finance partner for your business – a partner that will grow with your company, and support you and your business through every phase of its development. Alternative sources of funding are becoming ever more important for the survival of SMEs – and it is vital that you find a partner that enables you to take advantage of the opportunities they present.

Friday, October 23, 2009

Business Finance from Google Ventures


business finance

becoming an attractive option for many organisation with cash to spare, In March of 2009, Google unveiled its latest undertaking: Google Ventures. Google Ventures is a Google-backed venture capital group that aims to invest in new and exciting business plans. Funding is open to any company with a great idea, and the idea needn't be computer-based.

What is Google Ventures?
Google Ventures is a venture capital firm designed to provide funding to new businesses with exceptional ideas. Google Ventures, managed by Rich Miner and Bill Maris, has a starting balance of over $100 million dollars, and over 20,000 "exceptional Googlers" evaluating prospective businesses.

Google Ventures can provide funds ranging from seed money to millions of dollars in start-up capital to businesses they believe have the potential to be great. As an investment company, they are of course looking for businesses that will provide them with a return on their investment. However, they stress that they are also seeking innovative and creative companies who tackle problems in new ways.

Google Venture and Startup Companies
The aim of Google Ventures is to seek out potentially great companies under the leadership of entrepreneurs who will go on to do remarkable things. Google Ventures states that they are primarily interested in funding software companies, biotechnology companies, and companies in the consumer Internet industry Google Ventures operates separately from Google and investments do not have to be directly related to, or tie into, Google's Vision. Instead, they seek to maximize returns.

Only companies within North America are eligible for funding form Google Ventures as of 2009. Start-ups interested in being considered are urged to contact the company via email with a presentation or proposal. The website requests that proposals be limited to either twenty slides or no more than three typewritten pages, and cautions prospective business owners that they will respond only to companies they are interested in speaking with further.

Goals of Google Ventures
While Google is not new to investing, Google Ventures is different. Google will be using Google Ventures as their primary vehicle for making venture investments.

Google Ventures acknowledges that great ideas are not subject to recession or hard economical times. Ideas don’t stop, however the backing to make them become a reality does. In the face of economic downturn in 2009, Google is offering funding because they believe it is the time to invest in companies that have the chance to become "the next big thing." Google was founded by entrepreneurs, and they believe they should now help the future icons of the next generation.

Companies Helped
Google Ventures' first investments were made in April 2009. Pixazza was the first company offered funding by Google Ventures. Pixazza's core business is Internet advertising using pictures. Their business model involves transforming static images into interactive advertising vehicles. Consumers can "mouse-over" a picture to learn more about things they are interested in, or buy products they see.

Silver Spring Networks, whose core business is in smart grid technology, was next in line and in August of 2009, three more investments were made to Altarock, Brightsource Energy and eSolar, three alternative energy companies.

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