A (Genuinely) Easy Way to Access Capital

loans
You might remember a few months ago we told you the story of Mastermind member Carole Aldred who was able to fund two successful acquisitions to her burgeoning magazine business with the help of The Funding Circle. The Funding Circle, launched in 2010, aimed at tackling the two key problems of businesses struggling to access fi nance whilst people were getting a poor return on their savings, and what they do is lend money to businesses as a straightforward loan. There’s no equity investment involved here. The money is lent by a consortium of individuals who each bid on each particular loan in terms of how much theyare prepared to lend that particular company and at what rate of interest.

Now, one thing that you’ll always find about the Entrepreneurs’ Circle is that we practise what we preach and having reported Carole’s hugely positive experience (she procured two loans within  three weeks of each other and both were sorted and she got the money within seven days – a bit diff erent to dealing with the banks!) Well, when I returned from my Christmas holiday, I had made some pretty big decisions about my business that involved significant expansion this year and one element in particular was going to need some capital.

You might recall that I decided to proactively re-take control of my own business and eff ectively “buy out” all my franchised BGAs around the country.

A long story short, we concluded negotiations within six weeks of me making a decision, but it has meant that I’ve had to write some chunky cheques during March and in order to do that, I had to get some additional capital into the business.

So I thought I’d try The Funding Circle.

OMG. The whole process was so simple and so easy. We fi rst approached them on the Monday and by Wednesday evening we got confi rmation that we’d been approved to be listed on their site.  Our loan request went live on the Thursday morning and it was fully funded by the following Tuesday. The loan stayed live though for the full seven days allowed because every hour that went by, our interest rate came down.

The loan closed on the Thursday, exactly one week after it had opened, I signed the form and on the Friday morning, the funds hit our account.

I don’t want to give away all the details on these pages suffice to say that in total 2,191 different people lent us money as part of our consortium with an average loan of less than £100.

I really do think that this is an idea concept whose time has come and to date, according to their website, 72,160 people in the UK have joined up to lend over £234million to British businesses.  The government have got involved now and since the beginning of March, the final 10% of the loan is funded by the Department of Business.

Applicants are assessed and given one of four credit ratings (we were fortunate enough to get the top rating which meant our interest rate was one of the lowest). So, the reason I’m talking about  this here is that I want all members of the EC to know that there is ready access to funds available to you.

And it’s easier to access them than you probably think.

You have to have been in business for a minimum of two years before you can apply for funding and you can borrow for all sorts of requirements including working capital, expansion, asset finance, a one-off business expense or even to fund a marketing campaign.

Honestly, I was stunned at how easy and straightforward it was and if an extra £10,000, £50,000, £100,000 or more would make a big difference to your business, then you owe it to yourself to  look into this. The truth is, a lot of business owners and entrepreneurs allow themselves to be frustrated because of the lack of capital in their business and many big ideas and plans have been  thwarted because individuals didn’t have access to the cash in order to make them happen. This changes all that.

And that’s the final word…