..



.

SME Business News

Why You Don’t Need the Banks to Help Finance Your Business

  • Written by Jamie Cunningham


As the Royal Commission leads to an increase in lending standards and requirements for banks, many businesses will be forced to look outside the Big Four to raise the capital they need.

 

The good news is that there are a lot of untapped capital options for SMEs to look at.

 

The Royal Commission has meant that bankers are keeping a much closer eye on who qualifies for a business loan.

 

But this might be a good thing – people tend to regard the banks as the safest option for a business loan, but in my experience that’s not always the case – the banks can actually be riskier than the alternatives.

 

For example, there’s so much compliance that the banks need to meet, and if you don’t meet those ongoing requirements, you can lose your loan. For small businesses, the requirements for collateral and the standards you need to meet in the first place can be much higher.

 

They also have the least emotional investment in your business.

 

So let’s look at some of the other options to secure the finance you need.

 

Organic Growth & Efficiency

 

Choosing this option forces you to think differently and run a much leaner organisation. By focusing on efficiency and developing higher-than-average profitability, you can create the cash needs for growth internally. This approach also serves to future proof your business because you won’t owe anyone any money.

 

Angel Investors/Private Money

 

Angel investors speak the language of business far better than most banks do, but most small businesses have never even heard of the concept of angel investing. Angel investors can often have a soft spot for entrepreneurs because they know how valuable someone like that would have been when they were starting out.

 

Angels are generally more involved and more flexible when it comes to the success of the business. There are different angel networks out there that can be an excellent source of capital for your small business.

 

The three Fs – Friends, Family and Fools

 

Sourcing money and investments from your existing networks and private investors is always an option, but it carries with it the same risks as lending money in everyday life – you want to make sure it won’t affect your personal relationships.

 

Customer Pre-payments

 

If it suits your business, you can look at changing your payment structure so customers are paying in advance, allowing you to raise the capital that will allow you to grow and accommodate more customers in the future.

 

Second-and-third-tier lenders

 

While some second-tier lenders might have a slightly higher interest rate, many offer lower interest rates than the banks themselves. They also have a higher risk profile which means they’ll be more invested in the success of your business, and similar to angel investors, more flexible.

 

Of course, the banks remain an option if you’re looking to secure finance, but the important thing to remember is they aren’t the be-all and end-all. It’s important to think outside the square and consider all your options when you’re looking to establish or grow your company.

 

About Jamie Cunningham

 

Jamie Cunningham is an international speaker and business coach who has dedicated his career to making businesses better. Mr Cunningham built his business acumen working in the family printing business in Australia, where as Chief Operating Officer, he managed a multi-million-dollar business and led a team of 35 people. Knowing the time was right to move onto a new venture, he put a succession plan in place to extract himself from the family business and move with his Canadian wife to Canada where he still maintains a division of SalesUp, as well as several successful real estate ventures.

Now back down under, Jamie works with select clients who are ready to play at a higher level. He is currently writing a book that will be a blueprint for success in small business, covering human resources, finance, time and management.

Digital Agency

Business Daily Media Business Development

EXODUS TRAVELS UNVEILS THE MOUNTAIN LIONESS SCHOLARSHIP

Exodus Travels continues to grow its commitment to female porters within the Mt Kilimanjaro region.  Global Adventure Travel company Exodus Travels has today announced The Mountain Lio...

Erin Sing - avatar Erin Sing

Accor and Visa form global partnership

Accor, a world-leading hospitality group, and Visa (V: NYSE), the global leader in digital payments, yesterday (the 18th of February) announced a global partnership to bring new payment expe...

Media Release - avatar Media Release

Cruise Guru Celebrates CLIA Award Win with Offer for Australian Travellers

Leading Australian cruise agency, Cruise Guru, has been named ‘2019 Online Cruise Agency of the Year’ at the 19th Annual Cruise Industry Awards hosted by Cruise Lines International Associati...

Rhea D'souza - avatar Rhea D'souza

Exciting Things About Sydney

Sydney is one of Australia’s largest cities that boasts a population of over 4 million people. It is a city that is famous for its picturesque views, multicultural people, superb weather, ...

News Company - avatar News Company

Accor announces new partnership with Grab to help members Live Limitless

Accor has announced a new strategic partnership between its new lifestyle loyalty programme, ALL - Accor Live Limitless and South East Asia’s leading super app, Grab. The deal brings toget...

Accor Pacific - avatar Accor Pacific

Upgrading to Deep Pocket Sheets

So, you have this amazingly comfortable bed that has a built-in topper and you are struggling to find the right bedding. You need to look for a sheet called deep pocket sheets or mega fi...

News Company - avatar News Company

Business Daily Media Business Reports

8 TIPS TO MAKE OLD CLOTHES FASHIONABLE

You can change your old clothes and upgrade your wardrobe at a low price by using simple techniques. There are numerous videos on the internet that provide great tips t...

News Company - avatar News Company

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny



News Company Media Core

Content & Technology Connecting Global Audiences

More Information - Less Opinion