In turbulent times for business finance, the words “risk” and “funding” are inevitably connected. David Hing looks at what to watch out for in each SME funding option.
Funding and investment can be the lifeblood of a start up, or indeed any business that is looking to expand. The risks associated with funding change and evolve depending on what the investment landscape looks like at any given point.
Following the global financial crisis, squeezing any sort of loan or investment out of traditional sources has become much more difficult, which may have led desperate entrepreneurs to take too many risks with their funding. One could, however, argue that because of increased due diligence on the behalf of lenders, funding risks are simply harder to fall into than they used to be.
People are often caught out taking risks with their personal finances but businesses have very different funding options open to them. This has changed in recent years and extends outside of the traditional banking model. Each funding option comes with its own type of risk.
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