Finance and Funding for Your Business

Options for Funding Your Manufacturing Business

Options for Funding Your Manufacturing Business

Following the recession and the ‘credit crunch’ that preceded it, anyone in business is aware getting finance is difficult, even for healthy companies. For small manufacturers it may be particularly challenging, although hopefully with time, things will ease. To assist you, a range of options are listed below. They outline common sources of funding, together with initiatives and incentives available to financially benefit manufacturing businesses. We have provided some links and definitely suggest further investigation if they apply to you.

Additionally, professional financial assistance is highly recommended before selecting any funding solution – definitely get the opinion of your accountant and if you have one, your financial advisor.

Note: The information featured here is UK based, as is this website. However much of it will apply universally and as always, we are eager to hear about equivalent international funding sources.

Options for Funding Your Manufacturing Business: Common Funding Sources



• Overdraft: Probably the best option if short term cash is required. Common reasons include purchasing stock for a large order and general cash flow needs.



• Business Loan: Available from your bank. Be sure to ask for a manufacturing advisor who better understands your needs. Shop around for the best deal.



• Internal Funding: If your business is fortunate to be cash-rich with reserves in the bank, consider making your money work harder by funding in-house activities.  



• Grants: These are available from a range of sources for particular industries and geographical regions. Research to find out their availability and your eligibility. A good place to start is our Support for Manufacturing, Engineering and Technology section. A range of organisations, schemes and initiatives are listed, some of which offer grants.

 

Options for Funding Your Manufacturing Business: 

Beneficial Finance Initiatives and Incentives



• Funding Circle: Online marketplace enabling savers and investors to side-step banks and lend directly to small businesses. Rates are typically better than banks.



• Funding for Lending Scheme: Government backed initiative to increase lending to businesses, and so the wider economy. Available through regular banks.



• Supply Chain Finance Scheme: Government supported scheme where large companies help their supply chain access credit and improve cash-flow.



• URICA: Supply chain cash flow initiative where small and medium sized firms receive guaranteed payment for invoices within 14 days, for a 2% discount.



• Small Business Research Initiative (SBRI): Giving innovative technology companies opportunities to gain a publicly funded development contract.



• R&D Tax Relief and Credits: Offset the cost of R&D against your company’s tax bill. You may also potentially be paid a credit. A real incentive to invest in R&D.



• The Patent Box: Pay a lower rate of corporation tax (10%) on profits earned from patented products, technologies and innovations. An incentive to file patents



• Seed Enterprise Investment Scheme (SEIS): Offers tax-break incentives for investors into small start-up companies. A route to funding for entrepreneurs



• Assetz Capital: A peer-to-peer lending organisation where people can loan money directly to SMEs. Quick and convenient with highly competitive rates for borrowers

• Access to Funding and Finance (KTN): Covers strategies for assisting innovative companies to apply for and raise finance – whether that is through lending, grants, or equity-based investment.

For a straightforward, easy to understand guide to funding and finance, we recommend starting with the ‘No-Nonsense Guide to Small Business Funding’, illustrated below. Click on it to download the PDF. It is produced by Business Link, the Government business advisory service and so provides impartial advice, as well as guidance and links to further information.

Funding Your Manufacturing Business.

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