EBA Consulting Ltd

“Diligence is the mother of good luck.“ Benjamin Franklin (1706-1790)

Tel: 01554 890300

Choosing the best way of funding your business.

The ideal way to fund a business is to use our own money, make a quick profit, payback the initial investment and use cash generated to further develop the business. Unfortunately for most businesses it does not work like that so they rely on the financial institutions and other private investors to provide the necessary capital.

There are numerous financial products out there, from grants in the public sector, funding from banks normally in the form of overdrafts or term loans, asset lending, sales ledger finance either factoring or confidential invoice discounting through to private investors such as business angel and venture capital.

Access to this money is relatively easy but attitudes and criteria to lending according to product and financial institutions. Generally there is a funding package to suit all circumstances whether a business has a poor track record or has good profitability and a strong balance sheet.

However overriding all of this is the initial analysis of the business and why it needs the funds and will it have the ability to service the borrowing. Business planning together with some forecast models generally gives the business the best option in choosing the most suitable finance package as well as selecting the appropriate fund provider and minimising the personal risk as well as business risk.

The two major requirements in most businesses are working capital and asset funding. 

Asset funding in a business is often critical in its sustainability and growth, no investment in plant and machinery often means the business is held back. Many businesses in there early years of development or with a poor track record often find difficulty in obtaining funding but now there are more and more lenders in the market who see this as an opportunity in a growing entrepreneurial culture.

We can perform a risk analysis and suggest/implement alternative funding packages

If you are looking for funding regardless of the difficulties experienced to date contact us at enquiries@ebassociates.co.uk .

For general funding issues visit our  Business Funding section.

Or alternatively if you need specific assistance you can  contact us now  with further detail.

It is vital  businesses, especially the SME sector gain access to key areas of assistance to help them in their development process.

Mixed Budget.

Chancellor Gordon Brown unveiled a mixed Budget for business, with a pledge to get tough on tax avoidance.

In this year's Budget, Chancellor Gordon Brown did not extend the 100 per cent allowance for computer equipment for small businesses.

However, Brown has increased first-year capital allowances from 40 per cent to 50 per cent for plant and machinery, which means that if you invest your profits in this equipment, then you will get your tax relief faster. The new rate will apply to expenditure from April 1 2004 for corporation tax and April 6 2004 for income tax. And you can also claim for more types of expenditure when it comes to R&D.

But despite claiming that he wanted to encourage enterprise, the Chancellor upset many accountants and small business representatives by imposing an effective corporation tax of 19 per cent on profits distributed to individuals running their own businesses. This applies from the beginning of April, leaving you little time to prepare for the change in costs.

Two years ago many self-employed people earning less than £50,000 were encouraged to incorporate as businesses, after the Government introduced a zero rate of corporation tax on the first £10,000 of profits earned by such a business and a 10 per cent rate on profits between £10,000 and £50,000.

These rates continue to apply, but if such profits are paid out as a dividends, rather than reinvested in the business, then the owner-manager will be taxed at 19 per cent, in line with other income received.

Businesses looking to raise expansion capital of £1 million or more should also benefit from the Chancellor's decision to enhance the income tax relief given to investors in Venture Capital Trusts (VCTs) from 20 per cent to 40 per cent.

If you need specific assistance you can  contact us now  with further detail.

New bankruptcy legislation

New bankruptcy legislation designed to reduce small businesses' fears of going bust have been unveiled by the government.

The Department of Trade and Industry (DTI) said that the new Enterprise Act will end the 'one-size-fits-all' approach to bankruptcy and will encourage enterprise while cracking down on "irresponsible and reckless" creditors.

From today, a bankrupt will be automatically discharged from their bankruptcy after one year, rather than up to three years as happens currently.

Penniless entrepreneurs may even be discharged earlier, although ministers were quick to stress that the 'can pay, will pay principle' still applies, with bankrupts liable to lose their home and possessions if they fail to settle debts.

It is hoped that the new rules will reduce businesses' fear of failure and encourage more people to start up their own firm without being too concerned about going bust.

The DTI said that the Act will introduce a fairer regime for entrepreneurs who have failed through no fault of their own, while punishing bankrupts who take advantage of their creditors and the public.

If you need specific assistance you can  contact us now  with further detail.