An outright stake sale might not be the best fit for your company. Here are three different paths you could take:

1. Asset finance:
A loan to pay for a particular business asset, such as a vehicle or piece of machinery.

– Interest rates can be competitive if you are able to go through a mainstream bank, and you won’t need a huge down payment.
– You may be able to own the asset outright at the end of the loan term, upgrade the asset, or return it.

– Due to interest payments, it can be expensive to use asset finance rather than cash.
– The whole asset isn’t tax deductible while you’re paying for it — only the payments in the liabilities column on your balance sheet.

2. Crowdfunding:
Reward-based crowdfunding through websites such as Kickstarter or Pledgeme.

– Can be useful for market validation.
– Appeals can be launched by early stage growth companies, and those working off prototypes.

– Potential intellectual property concerns if an idea is made public.
– Compelling public offerings can be time-consuming.

3. Peer-to-peer lending:
Websites including Lending Crowd link borrowers with people willing to lend small amounts. Peer-to-peer lending platforms are relatively new and you should do your research before considering this option, including checking the latest guidance on the Financial Markets Authority website.

– Lending process is less time-consuming than a bank loan, with interest rates occasionally lower.
– Loans are unsecured — you don’t need to put up collateral.
– You are unlikely to be asked to give up equity in your business.

– Costs in addition to interest payments may apply, such as setup or platform fees
– High default interest rates (in addition to the agreed interest rates) likely apply
– Missed payments can affect your credit score.
– If you have a low credit rating, borrowing costs can be high.

Like to talk through your options? Give us a call today.

Disclaimer: This blog has been carefully prepared, but it has been written in general terms only. The blog should not be relied upon to provide specific information without also obtaining appropriate professional advice after detailed examination of your particular situation.