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If you are concerned about your business being impacted financially due to coronavirus, we are here to support you.
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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.

Why do Businesses Need Finance?

Business finance may be required by a business at a number of stages throughout the businesses journey, from starting out, to expansion. Managing your business’ finances may be necessary if you’re wanting your business to succeed and continue to expand.
Why do Businesses Need Finance?

Business finance may be required by a business at a number of stages throughout the businesses journey, from starting out, to expansion. Read on to find out what business finance means, why businesses may need it, and what could happen if there was a lack of it.

What is business finance?

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Business finance is the money that may be needed to establish or run your business.

Business finance includes the ways in which a business can source or acquire money. This can be through business loans, grants or other activity such as crowdfunding. However, a business finance loan is one of the most common sources of business finance due to the various lengths, loan rates and overall flexibility.

Business loans are an example of an external source of finance; this is where funds are found outside of the business from lenders, investors or banks. Unlike internal sources of finance, which are those found within the business such as assets or profit.

Why may a business need finance?

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Businesses may need finance initially in order to start up a business. These costs may include paying for a premise as well as any necessary equipment, advertising and staffing.

Finance may also be required to expand a business. For example, if a business needs to upgrade its stores or increase locations; finance may be necessary to fund any of these new or improved branches.

Businesses may also need to maintain finance in order to run successfully and make profit; this may include the funds to pay staff members and suppliers, or to improve your produce and service offering.

It’s important for business owners to recognise that continuous investment in your business, either through internal or external funds, may make your business more likely to succeed. Re-investing in infrastructure, assets, streamlining business processes and improving customer care has the potential to make your business more money in the long run and improve your general offering.

What could happen if a business does not have enough finance?

If a business doesn’t have enough finance or cash flow, payments to suppliers or the general customer experience may be hindered, which could increase the chances of working capital issues, bad credit and potentially a bad reputation.

Managing your business’ finances may be necessary if you’re wanting your business to succeed and continue to expand. This includes managing your cash flow, working capital and fully understanding your business’ finances. Head over to our blog for more information on how to manage business finances effectively.

Business finance for SMEs

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There are a range of business finance solutions available for SMEs. Here at Esme, we offer online business loans which are designed for busy SMEs looking for quick business finance with competitive rates. Our business loans range from £10,000 to £250,000* and can be repaid over a 1 to 5 year time period. Meaning you can choose a loan repayment plan that works for your business and its cash flow.

Before you apply for a loan with us, it’s important to ensure you meet the eligibility requirements below to increase your chances of approval.

  • You must be a sole trader or Director of a UK Limited company
  • Be over 18 years old and a UK resident & homeowner
  • Have been actively trading for more than 3 years
  • Have a turnover of more than £50,000 per annum and a track record of making profit

How could Esme help?

Why not get an instant quote today to see how much your repayments could be, alternatively you can apply for a business loan using our quick 10 minute application form.

*£25,500 to £250,000 for sole traders.