Finance Types

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Angel Investment

Angel Investment

Angel investing involves wealthy individuals offering finance directly to businesses in return for a share of equity. They normally provide advice and expertise in addition to funds.

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Asset Finance

Asset Finance

Buying a new asset outright can tie up large amounts of capital, so it may not be the most efficient approach. Asset finance offers an alternative way of funding your purchase.

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Bank overdrafts

Bank overdrafts

An overdraft is a borrowing facility attached to your bank account, set at an agreed limit. It can be drawn on at any time and is most useful for your day-to-day expenses as it can help you to manage your cashflow more flexibly.

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Bonds & guarantees

Bonds & guarantees

Bonds and guarantees comprise a range of services offered by banks, supporting businesses by guaranteeing their ability to meet contractual obligations.

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Business Cash Advance

Business Cash Advance

A business cash advance is an Unsecured Source Of Cash available to your business based on bringing forward your future credit and debit card sales. It’s repaid flexibly via a pre-agreed percentage of the business’ card transactions, so it will never interrupt your cash flow and there’s no such thing as a late payment. This is ideal if you run a seasonal business and your cash flow isn’t as strong in the quieter months, as you’ll make repayments relative to your income.

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Business credit cards

Business credit cards

You’re probably already well aware of the way credit cards work. Just like a consumer credit card, the business version lets you make a purchase and pay back the credit card issuer later.

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Business grants

Business grants

There are thousands of funding programmes in the UK that can help with the costs of setting up or growing your business. Local authorities, central government and the European Union are all potential sources of grants, not to mention charitable organisations with links to specific regions or industries.

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Commercial mortgages

Commercial mortgages

Commercial mortgages are the most popular type of mortgage, used to buy buildings and land for business purposes. The bank or lender holds the legal rights over the business property or land until the loan has been fully repaid.

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Crowdfunding/peer to peer

Crowdfunding/peer to peer

This type of finance is called lots of things, most commonly crowdfunding, peer to peer or person-to-person (P2P) lending. It involves individuals lending money directly to unrelated people and businesses without using a bank or financial institution as an intermediary and allows individuals and organisations to lend money directly to unrelated businesses via specialist websites, without involving a bank or other financial institution.

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Development Finance

Development Finance

Development finance is for residential property developments i.e construction projects, and is usually advanced as a loan towards land purchase and a loan in stage payments for development costs.

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Enterprise Finance Guarantee

Enterprise Finance Guarantee

The Enterprise Finance Guarantee (EFG) Scheme is a loan guarantee scheme funded by the government and distributed by banks. Under EFG, the government guarantees a percentage of a loan agreed between a bank and business customer.

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Equity Finance

Equity Finance

A method of financing in which a company issues a share of ownership in return for funding.

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Invoice finance

Invoice finance

Invoice finance can give your business a useful cash injection by releasing money tied up in outstanding invoices, providing an ongoing supply of capital linked to company sales.

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Letters of credit

Letters of credit

Letters of credit are issued by banks to guarantee that a seller will receive payment from the buyer by a specified time. They are often used in international transactions.

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Loans

Loans

Loans are the most popular form of raising money and come in two forms: secured or unsecured - both on a fixed or variable rate of interest. The costs of a business loan is driven by the market and depends on a wide range of factors.

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Mezzanine finance

Mezzanine finance

Mezzanine finance is a cross between conventional bank lending and private equity investment. It is lent against a stake in company ownership, giving the lender the right to convert any unpaid debt into equity.

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Responsible finance providers

Responsible finance providers

Responsible finance providers, sometimes referred to as Community Development Finance Institutions, are organisations which provide loans and support to people who find it difficult to access finance from mainstream sources.

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Start-up finance

Start-up finance

If you’re starting up a business, you may be looking to raise external finance. Britain’s banks are building strategic partnerships with business angel networks and community finance institutions, as well as providing full support to the Start Up Loans Company.

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Supplier finance

Supplier finance

Supplier finance allows a supplier to sell its invoices to a bank or factoring company at a discount as soon as they are approved by the buyer. That allows the buyer to pay later and the supplier to receive the money earlier.

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Trade finance

Trade finance

When businesses export abroad, they need to be sure they can both afford to produce the goods and be certain of receiving payment for them. Export finance covers a range of solutions to help mitigate financial risks such as default or delayed payment.

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