The flexibility of borrowing without the need to contact a lender appeals to many and, particularly during the start-up phase of business, can be implemented and managed very successfully.
However, while such loans can help companies to fund short-term ambitions, as their businesses grow and evolve, the finance options available to them do too. Although friends and family may be willing to help by providing the business with the funds required, the potential strain on personal relationships could be eliminated by choosing one or more of the plethora of alternative routes to finance available.
One of the big draws to borrowing money from loved ones is the notion of interest-free borrowing as opposed to the traditionally costly bank loan. What may come as a surprise to many business owners is that there are various other interest-free alternatives on the market.
Invoice finance is one such example; leveraging the value of unpaid invoices to secure funding can allow businesses to gain access to the money they are owed. The cash locked away in unsettled invoices can be released quickly and easily allowing businesses to continue growing their business without spending unnecessary time chasing debt and struggling with cash-flow issues.
Utilising business finance facilities means SMEs are able to tap into the knowledge and experience of a professional lender, which often come with the flexibility to work out problem-specific solutions. For example, asset finance is a perfect solution for companies looking to develop their business with new equipment, machinery or vehicles. Using asset finance to fund much needed equipment enables businesses to acquire new assets quickly with the cost of the equipment spread over an agreed period of time.
Borrowing money from family and friends for business
Borrowing money from family and friends for business can work successfully – but it’s not the only option. These days, SME owners have the opportunity to explore a wide range of alternative finance solutions, each designed to aid businesses on their path to success. Whether the need is to free up cash to pay staff and suppliers or invest in some efficiency-enhancing new equipment, alternative finance solutions exist to help businesses grow in a steady and controlled manner.
If you’d like to learn more about alternative finance solutions offered by Aldermore Bank, our team of specialist advisors may able to help. With a selection of options such as invoice finance and asset-based lending, Aldermore can help SMEs to fund growth and achieve their goals.
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