Business Finance Options


Adequate finance keeps the wheels of your enterprise turning, ensures that you meet your financial obligations when they fall due, and is essential to growing and expanding your business.

The particular form of business finance you choose may be critical to the success of your enterprise – so, fortunately, there is plenty to choose from here at ACF Direct.

The various types of business finance may be grouped under two broad headings – equity finance and debt finance – which are described in further detail in a Business Finance Guide published jointly by the Institute of Chartered Accountants in England and Wales (ICAEW) and the British Business Bank:

Equity finance

  • business angels – or “dragons” if you are a fan of the popular television series the Dragons’ Den – are wealthy individuals prepared to invest in your company in return for a share in its ownership (its equity);
  • venture capitalists are a similar breed of investor although they tend to be corporate organisations rather than wealthy individuals;
  • any form of equity finance involves your sharing ownership, successes and failures with the investor, who may also insist on participating in your company’s decision-making – you might not want to make that sacrifice;

Debt finance

Equity release

  • the alternative, therefore, is some form of debt finance – for which there are, once again, many sources into which we may help you tap;
  • equity release, for example, is probably a well-known and widely used device by which homeowners release capital which has built up in their home – but might be equally attractive to a business which owns property;
  • that equity release is achieved through what is effectively a re-mortgaging of the property concerned;

Mortgages

  • we arrange mortgages by way of business finance for the purchase of all manner of major assets;
  • these range from commercial property mortgages, marine mortgages, and even aircraft mortgages;

Finance and operating leases

  • if you do not want to take immediate ownership of a major asset – or remain undecided – but simply enjoy exclusive use of it, a finance or operating lease may offer an alternative form of business finance;
  • lease options are especially useful for the acquisition of manufacturing and agricultural machinery, coaches and buses, HGVs and even fairground rides;
  • from an accounting point of view you might also want to note that with effect from the 1st of January 2019, international accounting consultants Deloitte explains that the distinction between finance and operating leases is to be abandoned and all leases will in future be shown as balance sheet liabilities, expressed as the current value of all future lease payments;

Hire purchase

  • a more traditional approach might lie in making a hire purchase agreement;
  • as a conventional form of business finance, this typically requires an initial deposit – of around 10% of the purchase price, followed by equal monthly instalments for the remainder of the agreement;
  • once you make your last payment the vehicle becomes legally yours, as the funder transfers title, and for the duration of the agreement you benefit from capitalising the asset on your balance sheet.

Explore your options for business finance

So, when it comes to business finance, at ACF Direct we offer a whole host of options enabling you to move forward with your business, which you may grow and expand to meet the commercial challenges that await. Contact us today.