What do New Starts need to know when looking for finance?
As a specialist in finance for New Start companies, CAVA wanted to share some tips with those who might be looking to finance a vehicle or asset for their new business.
How do you know if you are a new start business?
This is usually down to the discretion of the funder. Some funders will view a company as a new start for up to a year but others may view this as 1-3 years so there’s no hard or fast rule that defines a business as a new start when it comes to securing finance.
Why can it be more difficult to secure finance as a new start?
Generally this comes down to financials and experience. Previous experience in your particular industry is an important factor. If you’re starting a new business which is in an industry you’ve never worked in, you may not have an existing customer base and as such your company is more “risky” to offer finance to than an established one.
Secondly, company financials are what a finance company would consider when working with a client. If you’re a new start, financial information will be limited. However, credit scores are also taken into consideration here and it’s not impossible to secure finance as a new start business, CAVA are experts in this area and have built up great connections with lenders.
What else might I need to be aware of when sourcing finance as a new start?
Our biggest piece of advice is to do your research! Know your numbers, know what you need to borrow, how much can you comfortably afford? Don’t overstretch yourself, be sensible with your first purchase.
This one might seem obvious, but you’ll need to be able to prove your identity and place of residence.
CAVA have helped many new start companies to secure finance, including KP Cabs (Cornwall) Ltd, A&A Travel (Sussex) Limited and Bryants Travel Ltd, all of whom have worked with CAVA for many years now.
Don’t hesitate to get in touch if you’re a new start company looking for assistance with competitive finance.