SME Adviser Series: Harvesting the power of the crowd

21 Aug 2018

It is the aim of any owner manager to achieve growth and success for their business, but sometimes it can be hard to see where this is possible. In order for businesses to start up on a solid financial footing, survive and thrive business owners must seek opportunities to maximise potential and put adequate measures in place to protect the health of their business, both now and for the future.

In this edition of Beavis Morgan’s SME Adviser Series, we discuss how companies can attract both debt and equity funding through crowdfunding platforms.

To explain in brief, crowdfunding is an increasingly popular, primarily online method of raising finance by asking a large number of people each for a small amount of money. These people, or investors, make a pledge online via a crowdfunding platform, such as Crowdcube, SyndicateRoom or Seedrs, to mention a few.

The practice first gained attention as a result of the financial crisis, when traditional fundraising routes dried up and businesses were forced to look elsewhere for funding. Since then, in both the UK and globally we have seen some very exciting crowdfunding developments.

Unlike the traditional methods of fundraising, crowdfunding can also offer non–financial benefits such as rewards, meaning that some investors may accept more risk than the traditional capital investors.

Whether it be donation/reward, debt or equity-based, crowdfunding is an innovative way of using the internet to harvest the power of the crowd - the public - to raise funding and enhance brand awareness via regulated crowdfunding platforms.

In Conclusion

With the UK going through a protracted Brexit process, more businesses are turning to alternative finance options when looking to deliver growth in uncertain conditions. However, whilst alternative finance is steadily becoming an ever more established part of the UK financial landscape, what is essential is that SME’s choose a specialist adviser who can recommend the right financial products for their specific business needs.

Our partner business, BM Structured Finance, specialises in sourcing and restructuring debt finance for SME businesses and is available to discuss the various fundraising options with you. We match the most suitable products to each individual circumstance and work together to ensure compatibility and satisfaction, thereby enhancing the business’ cash flow liquidity and facilitating maximum growth.

Whether you are starting up or a well-established business, cash is king and managing its flow is crucial to your long-term success. 

For more information about the topic covered in this article or to find out more about how we can help you and your business, please contact Steve Govey in the first instance, or your usual Beavis Morgan Partner.