Getting a loan: options for SMEs

Choosing the right funding solution for you and your SME can be a daunting task, let alone finding the right lender – so allow Funding Bay to help you find the right product for your business.

We take a look at the various alternative finance options out there for small businesses and start-ups that are looking to secure a loan.


Crowdfunding sites can be a great way to raise awareness of a project and secure some much-needed funding as a relatively low cost. Simply set you goal – the amount of money you want to raise – and a time period. People then pledge money in return for rewards or incentives that are determined by you – that might be equity, a chance to try out the first batch of product or an opportunity to attend an event. You can be as creative as you like here. Remember, it’s most effective when used as a short-term funding solution.

Unsecured loan

Opting for a secured loan or unsecured loan could make all the difference when it comes to the amount of interest a company ends up paying. A secured loan is backed by assets – for example, the person borrowing has pledged ‘security’, which could come in the form of vehicles or equipment, and that could be seized by the lender in order to pay off the loan. Start-ups or SMEs with few assets might end up using their own properties to secure a loan for their business. On the other side, an unsecured loan will usually be for less money than a secured loan, and will be subject to shorter terms and higher interest rates.


Put simply, this is a finance method where a business sells its receivables at a discount in order to secure cash up-front. Bear in mind that it can be an expensive way of raising funds as you might have to pay a fee that’s a percentage of the total amount. Many services allow companies to offer their discounted receivables to a number of factoring companies at once. These lenders bid on the invoices, which can be sold in a bundle or one at a time.

Invoice financing

This is one way to solve the problem of delayed payments. It’s also usually a quick option, as it doesn’t require much paperwork and the process is fairly straightforward to apply online. When seeking invoice finance, remember that you don’t have to enter a full-ledger facility, you can choose the invoices you’d like to have advanced. So, depending on your business needs at any given time, you have the flexibility to adjust your cashflow position by selling single invoices or a few at a time.

How Funding Bay can help

Funding Bay is a finance introducer with unparalleled industry experience, and the team can put business owners in touch with the lenders who will best suit their business’s requirements. This means personal, jargon-free guidance.

Ultimately, they help SMEs raise capital and find the relevant finance product for your needs – enabling business owners to concentrate on the day-to-day running of their company rather than losing time worrying about cashflow.

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