What is the best funding option to grow my fashion business?
My 32-person fashion business includes two Yorkshire-based boutiques, a recently opened outlet in central London and a small design studio on the wholesale side. I have a £250,000 factoring facility in place to support the wholesale side, but need to raise funds of around £1m to open four further retail outlets, for which we have options in place. What method of funding would complement my existing arrangement?
Dave Richards of IGF writes:
The answer to your question in part depends on where the outlets you have mentioned are to be established. For example, if they were to be set up in certain regeneration areas within the UK then a number of government-backed schemes that involve providing businesses with financial assistance may be available.
One of these is the London-based initiative Access to Finance. This scheme provides assistance to businesses in certain rundown areas of London and boosts their prospects by providing subsidised consultancy services, thereby increasing each business’ chances of gaining financial backing.
The DTI, for its part, also provides a wide range of assistance including help with capital investment issues, supply chain management difficulties or worries with design/branding. It also helps with reviewing the availability of funds via, for example, the Regional Enterprise Grant Scheme.
Initiatives such as the Small Business Service, National Business Angels Network, Phoenix Fund and Princes Trust, all assist small and medium sized businesses via grants, guaranteeing and issuing loans, offering mentoring programmes and investment. Development capital can be used to raise the necessary funding, but this along with business angel investment will dilute your own equity base. It can, however, lead to significant financial assistance and invaluable expertise.
As always, whatever finance you end up seeking, a professionally prepared business plan is the first step to securing assistance.