Bishop Fleming Partner, Chris Walklett, addresses the question of where do you go when the bank says no?

It can be a major challenge for a business to raise funds to grow a business, invest in new equipment, or to recruit new staff. If an application for a loan is rejected by a high street bank, a sense of despondency can arise in a business owner who wonders what to do next.

Well the good news is that all is not lost, far from it in fact. There are many alternative forms of finance available. It is surprising that very few businesses appear to spend much time researching these alternatives.

In fact since November 2016 high street banks have been legally obliged to refer businesses who have been refused finance to alternative providers. And whilst this can appear rather like mechanistic signposting from a computer printout, a much wider range of solutions will be available from a professional adviser.

Let’s take a look at what’s out there.

R&D Tax Credits

Innovative companies may be able to claim Research & Development (R&D) Tax Credits from the government amounting to tens of thousands of pounds. There has been a 20 per cent increase in Midlands-based companies claiming R&D tax credits in the last year. Over £230m was paid out to West Midlands companies alone, but when you consider that total claims across the UK amounted to over £2.9bn, you can appreciate the potential for further claims.

Many companies simply don’t think they are eligible to claim, which is a stubborn myth; the benefits are there for all that are developing and improving their products, services or processes. It’s not just for those who wear white coats in labs.

The government has sought to make the R&D scheme even more attractive through relaxing the rules and increasing the rates of relief.

In the past year Bishop Fleming has secured over £66m in R&D tax credits for businesses, having secured over £200m in R&D relief over the past six years. We continue to help hundreds of companies to grab their share of the R&D cake.

Grant funding

Grant financing can best be sourced through a professional adviser who will have the specialist knowledge to find the right funding. An adviser will be able to explain what schemes are available and whether your business meets the qualifying criteria, as well as assist with the application process.

Bishop Fleming maintains a grants database of more than 100 schemes. We’ve already helped secure over £20m of grant funding for various projects, covering capital investment, recruitment and training, consultancy, mentoring and marketing.

Local Enterprise Partnerships (LEPs)

LEPs are voluntary partnerships between local authorities and businesses that are a valuable source of advice and support. Bishop Fleming is an active member of the Worcestershire LEP. LEPs help with sources of finance, networking, and sharing knowledge, best practice and intelligence.

Other sources

Other sources of finance can include: Peer to Peer Business Lending, crowdfunding, invoice trading, and pension-led funding. Bishop Fleming’s award-winning corporate finance team is available to discuss all the options for your business.

There are a number of additional routes to explore when the bank says no. It is important you are challenging your advisors to help explore and sign-post those sources of alternative funds.

For more information, please contact Chris Walklett, or a member of our Corporate Finance, Grant Services, or Business Tax teams.

[This article first appeared in the Birmingham Business Post]


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