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Please note, we are not an Accredited Lender for The Coronavirus Business Interruption Loan Scheme (CBILS). Visit The British Bank for more information on the scheme.

Sources of Finance for Small Businesses

There are many different ways businesses can secure finance outside paying a visit to your bank manager. By doing your research before you need to secure finance, you’ll be better prepared when it comes to making the application.
Sources of Finance for Small Businesses

A survey of small business owners in the US found that one of their biggest worries was cash flow. Whether you need finance to alleviate an emergency situation, want to expand your business, or want to better budget in the coming months, business finance could help with that.

What is business finance?


Put simply, business finance is money and credit held within and for your business. Finance for business can be short term and long term.

Why do businesses need finance?


There are many different types of business finance, all of which can generally be described as either short-term or long-term. Each of these has it’s own merits and are usually used to meet different types of business needs.

Short term finance could help with day-to-day expenses like utilities, stock, and rent.

Long term finance helps with bigger picture business ideas like moving premises, or items that are essential to running our business like vehicles or machinery.

Depending on your business’s needs, business finance could help you to successfully run your business.

Sources of business finance


Before you decide what type of financing you need, it’s important to remember that preferential rates work in a similar way to personal finance. Being organised and keeping on top of your credit score is a step in the right direction for getting the best possible business finance.

There are loads of different sources of business finance including ones that aren’t provided by banks.

Business loans


A business finance loan is one of the main sources of business finance. Because of varying rates and loan lengths, business loans aren’t necessarily just for long term finance.

Business loans could also be a great source of finance if you’re looking to gain funds quickly. Here at Esme, we offer business loans with competitive rates and aim to have the money in your account within an hour after getting approved.

The key thing to remember with business loans is to do your research and our blog is a great place to start.

Crowdfunding campaigns


Crowdfunding has emerged in recent years as a way for businesses to raise money for projects they might not otherwise be able to get finance for.

Some platforms are exclusive for certain types of businesses like musicians and designers. Other crowdfunding websites specialise in business finance for unique and innovative products, and some are a catch all. You may be charged a flat fee or percentage once you’ve met your target so be sure to account for that when working out your target.

Kickstarter is probably one of the most well-known crowdfunding platforms but there are plenty of others out there. It provides creative businesses the chance to raise funds for creative projects.

Indiegogo is exclusively for unique and innovative products. It’s a great platform if you’ve thoroughly researched your market and product and believe in your business case.

Just like you’d research the right loan provider, you should research the right crowdfunding site for you. It’s also important to bear in mind that crowdfunding might not be for you if you’re looking for quick business finance as it can be a lengthy process. There is also no guarantee of receiving all the funds.

Business credit cards

Business credit cards are a convenient and versatile source of short-term business finance. Just like you would use a personal credit card for all sorts of expenses, a business credit card is the same. So long as you meet your payment deadlines, your credit can increase so it’s incredibly flexible - especially if you’re looking to borrow a small amount of money over a short period.

Some business credit cards come with added benefits like insurance or discounts but that shouldn’t be what sways you when it comes to choosing. Look at the interest rates and fees that apply and use those as the gauge to choose the right card. It’s also worth bearing in mind that if you’re unable to meet the monthly repayments, interest rights can be a lot higher than other sources of business finance.

Applying for a business credit card is a different process to apply for a personal card. Be sure to look up the application process first so you know the information you need to hand to complete the application.

Business funds and grants

Another option that many businesses may overlook are funds, bursaries, or grants that have been specifically set up to help companies thrive. These may come directly from the government or local council or might be from a non-profit.

Business funds will have criteria that you will have to meet in order to meet funds, which could make the application process important but also lengthy. Again, and we can’t say this enough; do your research to build a solid business case as to why you deserve the funding.

Funds don’t necessarily mean you’ll receive money for free. Rather you may get lower rates or access to things like workspaces and resources.

The government website has a great list of funds all around the country that provide different sources of business finance.

Consider the right business finance


You may know that you need to finance for your business, but with so many options available it can be hard to know where to start. You may get a better idea of what suits your business best if you talk to an accountant or finance advisor. Our blog is packed full of useful advice about business loans and juggling your finances making it a useful place to start your research.

How could Esme Loans help?

Here at Esme, we offer quick business loans that could be with you within an hour after getting approved. Applying is also easy, just complete our 10 minute application form or get an instant quote to see how much your repayments could be. We offer business finance ranging from £10,000* to £250,000 over a 1 to 5 year repayment period. For more information on our business loans, check out our how to apply guide.

*£25,500 for sole traders