Informed Funding has a wide range of types of finance that we can connect your business with. As the UKs largest online funding platform of its kind, we can connect you with a large network of funding providers, who offer a large variety of different types of finance.
You can learn more about each of the different types of finance on offer below.
Since the financial crisis in 2008, Banks have become more reluctant to lend to growing businesses and SMEs.
Many like-minded people saw this as an opportunity and set up business that offer, what was at the time considered to be ‘alternative finance’, or capitalised on the gap in the market by growing their existing businesses that already offered these alternative finance sources.
As growing business owners turned to these providers for finance, these sources became less ‘alternative’ and more ‘mainstream’, as Banks were no longer seen as the primary option for financing business growth.
The increase in types of finance has now given business owners a new problem; which type of finance should they choose?
Funding providers that offer these different funding options have microsites on our website which you can access to learn more about the type of finance that they offer, as well as the business itself. By following our 5 simples steps, we can determine which of these funding providers would suit your business most.
Equity Finance
Equity Finance is finance raised through selling shares in your business. Angel Networks, Crowd Funding, Private Equity, Public Equity and Venture Capital are all types of finance that fall under this category, as each requires the owner of the business to offer shares to those who are looking to make an investment in the business.
Short Description: Probably the most common way for start-up and early–stage companies to raise funding is via groups of business angels – often experienced entrepreneurs who acquire shares in early-stage businesses using their own funds. Angels often invest in groups, or syndicates, and may take one or more seats on the board of the investee company, providing expertise and contacts as well as finance.
Short Description: Crowd funding enables businesses to raise money by selling shares to the public, usually via an online platform. Investors can put in very small sums and normally benefit from tax incentives such as the Enterprise Investment Scheme and Seed Enterprise Investment Scheme. In some cases businesses selling shares can control the size and pricing of the offer.
Short Description: Private Equity investors usually acquire established companies in order to help accelerate their growth, for example by expanding into international markets or by acquiring competitors in order to consolidate their position. Transactions can include management buy-outs, management buy-ins and refinancings that allow owner-managers to stay in place while realising a portion of their equity value. PE funds usually aim to hold their shares for anything between three years and seven years.
Short Description: Raising funds via the equity markets involves offering shares in a company to the public that will be tradable on a public market such as the Stock Exchange or any of the smaller markets such as ISDX. If companies are seeking more than the equivalent of E5m they will be required to publish a prospectus, a legal document that complies with the EU Prospectus Directive.
Short Description: Venture Capital funds buy shares in young companies that are at a fairly early stage of their growth. Companies that raise funds this way will normally be generating revenue but may not yet have reached profitability or be breaking even on a cash flow basis. However, some VC firms also back start-ups. Venture capital investments typically range from a few hundred thousand pounds up to £2m-plus.
Debt Finance
Debt Finance is finance that requires you or your business to pay back the finance that is offered, as you would do with a loan from a bank. Each different type of debt finance has different requirements and characteristics, with some asking you to offer assets as a means of security. Types of finance that fall under the debt finance category are Asset Finance, Mini Bonds, Business Credit Cards, Cash Advances, Commercial Mortgages, Early-Stage Development Loans, Larger Business Loans and Single Invoice Finance.
Short Description: Asset finance, or leasing, offers a popular way for companies to acquire essential equipment of all sorts - from vehicles to IT equipment and machinery - without having to pay the full cost up front. Assets are paid for over the life of the lease in instalments and, depending on the type of lease involved, may ultimately be owned by the company or returned to the lessor.
Short Description: Business credit cards offer a way for companies to obtain flexible short-term funding up to set limits and to borrow interest-free for periods of up to 56 days provided that the card balance is cleared in full each month. Cards can be issued for can be issued with spending limits and restrictions on where they can be used, to prevent abuses.
Short Description: Cash Advances provide unsecured funding that is repaid by deducting a fixed percentage from the borrower’s income each day. They are often used by businesses that receive much of their revenue via card payments, the fixed daily percentage being deducted automatically by the merchant services provider and passed to the lender.
Short Description: Commercial mortgages are used to finance the purchase of business premises and have terms that can vary from less than three years to 20 or more. They are secured on the property being financed via a first charge. Conventional commercial mortgages usually require repayments of capital and interest, although in some cases interest-only products may be available.
Short Description: Companies that are relatively young but are trading profitably and do not have sufficient assets to secure a conventional loan may be able to raise development funding from a range of potential lenders. As these loans may be unsecured, they will tend to command higher rates of interest than standard, secured loans since they are riskier for the lender.
Short Description: Raising funds based on the outstanding invoices to business customers.
Short Description: Established companies that need to finance large investments will usually use a combination of debt funding and their own cash balances. Larger loans or bond issues will need to be secured against the assets of the business and, in some cases, against the personal assets of the directors as well. They may also carry covenants that the borrower must keep within, for example a minimum ratio of earnings to interest payments.
Short Description: A mini-bond issue enables a company to raise debt funding from a group of individual lenders, usually its customers. Bond issues below €5m do not require a full legal prospectus and any bonds issued cannot normally be traded from one investor to another. In effect, most mini-bond issues are unsecured loans that must be held for their full term or until the borrower redeems them.
Short Description: Platforms that arrange loans from groups of individuals or organisations to business borrowers.
Short Description: Using a business owner's pension to obtain a commercial loan.
Short Description: Companies with business customers can use a range of services to raise money against selected invoices, rather than financing their whole sales ledger as with conventional factoring and invoice discounting facilities. Single invoice discounting is offered both by specialist finance providers and by online, auction-based platforms, where groups of investors compete to buy the invoices, which can drive down the cost of finance.
Debt Finance
Equity Finance is finance raised through selling shares in your business. Angel Networks, Crowd Funding, Private Equity, Public Equity and Venture Capital are all types of finance that fall under this category, as each requires the owner of the business to offer shares to those who are looking to make an investment in the business.
Debt Finance is finance that requires you or your business to pay back the finance that is offered, as you would do with a loan from a bank. Each different type of debt finance has different requirements and characteristics, with some asking you to offer assets as a means of security. Types of finance that fall under the debt finance category are Asset Finance, Mini Bonds, Business Credit Cards, Cash Advances, Commercial Mortgages, Early-Stage Development Loans, Larger Business Loans and Single Invoice Finance.
Short Description: Asset finance, or leasing, offers a popular way for companies to acquire essential equipment of all sorts - from vehicles to IT equipment and machinery - without having to pay the full cost up front. Assets are paid for over the life of the lease in instalments and, depending on the type of lease involved, may ultimately be owned by the company or returned to the lessor.
Short Description: Business credit cards offer a way for companies to obtain flexible short-term funding up to set limits and to borrow interest-free for periods of up to 56 days provided that the card balance is cleared in full each month. Cards can be issued for can be issued with spending limits and restrictions on where they can be used, to prevent abuses.
Short Description: Cash Advances provide unsecured funding that is repaid by deducting a fixed percentage from the borrower’s income each day. They are often used by businesses that receive much of their revenue via card payments, the fixed daily percentage being deducted automatically by the merchant services provider and passed to the lender.
Short Description: Commercial mortgages are used to finance the purchase of business premises and have terms that can vary from less than three years to 20 or more. They are secured on the property being financed via a first charge. Conventional commercial mortgages usually require repayments of capital and interest, although in some cases interest-only products may be available.
Short Description: Companies that are relatively young but are trading profitably and do not have sufficient assets to secure a conventional loan may be able to raise development funding from a range of potential lenders. As these loans may be unsecured, they will tend to command higher rates of interest than standard, secured loans since they are riskier for the lender.
Short Description: Raising funds based on the outstanding invoices to business customers.
Short Description: Established companies that need to finance large investments will usually use a combination of debt funding and their own cash balances. Larger loans or bond issues will need to be secured against the assets of the business and, in some cases, against the personal assets of the directors as well. They may also carry covenants that the borrower must keep within, for example a minimum ratio of earnings to interest payments.
Short Description: A mini-bond issue enables a company to raise debt funding from a group of individual lenders, usually its customers. Bond issues below €5m do not require a full legal prospectus and any bonds issued cannot normally be traded from one investor to another. In effect, most mini-bond issues are unsecured loans that must be held for their full term or until the borrower redeems them.
Short Description: Platforms that arrange loans from groups of individuals or organisations to business borrowers.
Short Description: Using a business owner's pension to obtain a commercial loan.
Short Description: Companies with business customers can use a range of services to raise money against selected invoices, rather than financing their whole sales ledger as with conventional factoring and invoice discounting facilities. Single invoice discounting is offered both by specialist finance providers and by online, auction-based platforms, where groups of investors compete to buy the invoices, which can drive down the cost of finance.
Equity Finance
Equity Finance is finance raised through selling shares in your business. Angel Networks, Crowd Funding, Private Equity, Public Equity and Venture Capital are all types of finance that fall under this category, as each requires the owner of the business to offer shares to those who are looking to make an investment in the business.
Debt Finance is finance that requires you or your business to pay back the finance that is offered, as you would do with a loan from a bank. Each different type of debt finance has different requirements and characteristics, with some asking you to offer assets as a means of security. Types of finance that fall under the debt finance category are Asset Finance, Mini Bonds, Business Credit Cards, Cash Advances, Commercial Mortgages, Early-Stage Development Loans, Larger Business Loans and Single Invoice Finance.
Short Description: Probably the most common way for start-up and early–stage companies to raise funding is via groups of business angels – often experienced entrepreneurs who acquire shares in early-stage businesses using their own funds. Angels often invest in groups, or syndicates, and may take one or more seats on the board of the investee company, providing expertise and contacts as well as finance.
Short Description: Crowd funding enables businesses to raise money by selling shares to the public, usually via an online platform. Investors can put in very small sums and normally benefit from tax incentives such as the Enterprise Investment Scheme and Seed Enterprise Investment Scheme. In some cases businesses selling shares can control the size and pricing of the offer.
Short Description: Private Equity investors usually acquire established companies in order to help accelerate their growth, for example by expanding into international markets or by acquiring competitors in order to consolidate their position. Transactions can include management buy-outs, management buy-ins and refinancings that allow owner-managers to stay in place while realising a portion of their equity value. PE funds usually aim to hold their shares for anything between three years and seven years.
Short Description: Raising funds via the equity markets involves offering shares in a company to the public that will be tradable on a public market such as the Stock Exchange or any of the smaller markets such as ISDX. If companies are seeking more than the equivalent of E5m they will be required to publish a prospectus, a legal document that complies with the EU Prospectus Directive.
Short Description: Venture Capital funds buy shares in young companies that are at a fairly early stage of their growth. Companies that raise funds this way will normally be generating revenue but may not yet have reached profitability or be breaking even on a cash flow basis. However, some VC firms also back start-ups. Venture capital investments typically range from a few hundred thousand pounds up to £2m-plus.
