If you’re in possession of property, inventory, or unpaid invoices, you have a wealth of options for collateral when it comes to raising finance
Small businesses need constant access to capital in order to grow. In fact, it has been said that the average UK business needs around £22,000 just to survive its first year in order to cover overheads such as office rent, staff and inventory.
Some entrepreneurs will use their own savings to fund a business and some will take out an unsecured personal loan or government grant; the challenge is having sufficient capital to stimulate growth. For many start-ups and small businesses, using some form of collateral is the best way to secure the funds they need.
For those lending to businesses, having some form of security or collateral means that their risk is heavily reduced, because they are able to recoup a physical asset and sell it in order to recover their costs. Below, we discuss the different types of security and collateral available for small businesses.