TOP TIPS FOR CROWDFUNDING

Picture Courtesy of Crowdsourcing

Picture Courtesy of Crowdsourcing

TOP TIPS FOR SECURING FUNDING VIA CROWDFUNDING
Written by Richard Watts Monday, 03 February 2014.Today, there are countless more ways to fund the growth of SMEs than there were 12 months ago. This is great news for UK enterprise, but what does ‘alternative finance’ actually mean? And if alternative methods of funding are right for your business, how do you go about securing them?
shutterstock 149428370According to recent research from FundingKnight, the crowdlending platform for UK businesses, two thirds (66%) of SMEs say they need funding to grow. Almost a third of business leaders go as far as to say it’s ‘vital’ and almost a quarter (24%) say without it, their growth will be far slower. Yet more than half (53%) of SME owners and decision makers admit that they aren’t confident that they would currently be able to get traditional bank funding. This lack of confidence can sometimes be the prompt which encourages businesses to look at other ways to finance their growth. In fact, one in five businesses questioned had already used crowdlending themselves. However, for the remaining one in five who haven’t, it can be difficult to know what to expect, how to apply, and how to improve your chances of success.

So what should businesses do to prepare themselves?

Invest time in your business plan
Peer to Business lending platforms will review business plans along with other details about your company and its financial information when considering the initial loan application. In fact the most reputable platforms will review all of this information extensively in much the same way as a bank would, and will consider the profile and history of the individual business owners as well as your company as a whole. Your business plan needs to clarify your business idea, excite and engage those reading about it but also make it clear that you’ve thought about both short and longer term objectives. This is integral to securing investment.

Build a great profile
Equally, it’s important that investors hear about your business. Building a buzz around what you do, either via social media or just making sure your website and back links are done really well gives a greater sense of credibility about you and your business. This is particularly important given that, in a recent poll of High Net Worth investors, when asked what they look for when it comes to investing in SMEs the following were rated as the top three:

· Previous profitability (47%)
· A business person they can trust (41%)
· A good idea (29%)

All of these attributes can be showcased via your online channels and your application for funding. There are some other simple things you can do to improve search engine optimisation so investors can find your site easily, such as installing Google analytics, considering what keywords people will use to search for the business. If your company doesn’t have a social media presence, Google analytics can be used to drive traffic back to the website via tweets, LinkedIn posts or blogs.

Embrace community spirit
Business leaders tend to feel familiar with the concept of networks or communities, and a crowdlending platform acts very much like an online community, or a marketplace where investors can search for opportunities and browse businesses that engage them. If you’re accustomed to attending physical networking events such as industry seminars, local business events etc, or you use LinkedIn or other social channels to make valuable connections and promote your business then you’re already using the power of the crowd. Securing a loan via crowdlending is no different.

Be ready
One of the biggest benefits of crowdlending platforms is the flexibility and speed at which applications are reviewed. If your business receives a conditional offer, you will typically have around five working days to consider it. So, it’s important that you are ready to make a prompt decision, and you and your leadership team have done all of the thinking and planning before making the application. That way, funds can be quickly injected into your business once a decision is made, moving a valuable step closer towards perhaps opening up a new premises, purchasing new equipment, or improving working capital – and perhaps most importantly, fulfilling the ambitions you have for your company.
Source:
http://www.entrepreneurcountry.com/united-kingdom/ecosystem-economics/item/top-tips-for-securing

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