Small and medium-sized businesses have a huge impact on the UK economy, representing 99% of all private sector businesses and contributing over half of the country's GDP. However, there are still many challenges for these companies in terms of accessing finance. In this article we'll look at different financing options available for SMEs and how they can get access to the cash they need to grow their business.

1. What all financing
options are available
for SMEs

2. Introduction
Small and medium-sized businesses have a huge impact
on the UK economy, representing 99% of all private
sector businesses and contributing over half of the
country's GDP. However, there are still many challenges
for these companies in terms of accessing finance.
In this article we'll look at different financing options
available for SMEs and how they can get access to the
cash they need to grow their business.

3. Why are SMEs important to the
economy?
Small and medium-sized enterprises (SMEs) play an
important role in the economy. They are the backbone
of many industries, and they create employment
opportunities for many people. SMEs are generally
defined as companies that have fewer than 250
employees or annual turnover less than $50 million,
with some being much smaller than that.

4. How to access business finance for startups?
There are several different ways to access business finance for startups. The
first is through your bank or financial institution, as well as other traditional
lenders such as credit unions and peer-to-peer lending platforms. If you're
looking for a quick loan with no hassle, this may be the way to go. However,
it's important to note that while these lenders can offer you flexible repayment
options, they will also charge higher interest rates than other types of
financing—and those rates are usually not fixed long term either!
One more option is crowd funding: an online platform where people from all
over the world can donate money towards your startup project in return for
some kind of reward (like products or services). There's no guarantee that
people will want to give money away though so make sure there's enough
information about why donating would benefit them too before asking for any
pledges!

5. Bank Loans
If your business has been around for a while, bank
loans may be an option. Banks are more likely to lend
to businesses with a proven track record. To obtain a
loan from a bank, you'll need to have an established
business with positive cash flow and a good credit
score. You'll also need collateral (like property) in case
the business cannot repay its debt obligations.

6. Business Credit Card
A business credit card can be a great option for your small business if
you have bad credit. Unlike personal credit cards, business cards are
unsecured and don’t require collateral. Most banks and financial
institutions will approve you even if your personal credit is not perfect.
Business credit cards offer a number of benefits including:
 Cash flow management – You can use the card to pay for expenses
that would otherwise put cash flow at risk, such as payroll or other
bills
 Interest-free periods – Many business cards offer interest-free periods
on purchases if they are paid in full within 12 months of the date of
purchase

7. Crowdfunding
Crowdfunding is a way to raise money for a project or cause by
getting a large number of people to contribute small amounts of
money. Crowdfunding has been around for several years now and
it's popular in many countries. In Canada, crowdfunding is often
used as a way to finance businesses.
Crowdfunding platforms like Kickstarter and Indiegogo allow you
to create a fundraising page where you can pitch your project and
share important details about it (such as what the funds will be
used for). The person who creates this page also sets their own
deadline for having raised enough money. If this goal isn't met
within that time frame, no one gets charged anything!

8. Bill Discounting
Bill discounting is a financing option that allows you to delay paying your vendors by
giving them a discount on their invoices, instead of paying them immediately. The vendor
will then pay you back the discounted amount over time with interest. This works like an
auto-loan in which you borrow money from the bank and pay it back over time with
interest.
How does Bill Discounting work?
Let’s say you have agreed to pay Widget Inc $1,000 for goods and services provided. You
let Widget Inc know that you need some extra time before paying them so they agree to give
you a 60% discount if they get paid within 30 days (instead of immediately). You pay
Widget Inc $300 now ($600 total) while agreeing that at any given point in the next 30 days
(up until 1 month), either party can cancel the deal without penalty. If neither party cancels
after 30 days, then both parties must abide by their initial agreement: Widget Inc gets paid
$600 by your company within 30 days or else they will have 40% repossessed from their
account as late fees because no payment was made when due . This same process can be
applied when there are discounts greater than 50%.

9. Reverse Factoring
Reverse factoring is a form of invoice discounting, which is a method of
raising money by selling your invoices to a lender. Invoice discounting is an
alternative to bank overdrafts and business credit cards.
When you apply for reverse factoring, you’ll be asked to provide your
business financials and details about how much cash flow you need from the
loan. You should also provide information on any previous loans or other
debts that have been taken out in the past, as well as information about any
employees that are working for your company.
Once the lender has this information and approves the application, they will
pay off certain invoices at once while holding onto others until they get paid
in full through normal collection channels (i.e., getting payment directly from
customers).

10. Invoice Discounting
Invoice discounting is a form of asset-based lending, and is one of
the most common forms of lending for small businesses. It allows
business owners to borrow against their unpaid invoices.
The process works by allowing companies to exchange their
accounts receivable for funds from an invoice finance provider.
This means that they will be paid upfront on their outstanding
invoices in full, with no need to wait until the customer pays them
back (which can take up to 120 days). The company then pays
interest on this amount over time as well as fees based on how
much has been borrowed and how long it takes them to pay off
their loan (typically between 60 and 90 days).

11. Accounts Receivable Financing
Accounts receivable financing is a short-term loan based on
the value of an invoice. It’s a great way for small businesses to
get cash quickly and fund inventory purchases, which can be
especially important if you have regular customers who pay on
time. The loans can be customized to meet your needs, so
they’re flexible enough to fit into your overall financial
strategy.

12. Conclusion
In conclusion, we can see that there are various
financing options available to SMEs. This provides
them with the opportunity to expand their businesses
and achieve their goals. However, it is important for
you as an entrepreneur to understand your needs before
deciding which type of financing is right for you and
your business.

13. ThankYou