Young businesses decision makers (aged 16 to 29-years-old) are the most open to using external finance, with 57% planning to access additional funds in the near term according to research from Nucleus Commercial Finance. A further 61% say they would experience damage/detrimental effect to their business if they’re not able to access the funding they require.
This proactive approach to accessing finance could help build their business’ financial resilience, as only 17% of young business decision makers have cash reserves that would last more than a week if their business was suddenly and unexpectedly unable to trade. This figure sits at 13% across all businesses – revealing the financial precipice that many businesses operate on.
Despite their appetite to utilise funding to grow their businesses, these young business decision makers are the most fearful across business owners of all ages. They are most concerned about a repeat of 2008’s financial crash (38%) and Brexit (38%), compared to older business leaders who are more sanguine – perhaps due to having previous experience of crises.
Chirag Shah, CEO of Nucleus Commercial Finance, comments: “Young business leaders have grown up in an environment of economic uncertainty, but are taking brave steps by running their own businesses. They are the future of our economy’s success and through their entrepreneurial endeavours are significantly contributing to business and society. It’s crucial that both they and their businesses are supported, enabling them to thrive and invest in future growth.”
“Despite the need for businesses to secure finance to grow, only 7% said access to advice from a dedicated expert was a top priority when looking to secure funding. However, our work with businesses of all ages and sizes day-in, day-out tells us that the support and personal approach we provide is seen as invaluable. And often the financial solution we develop with them is more tailored and useful that they had imagined at the outset.”
To help young business leaders, Nucleus Commercial Finance has developed five top tips for those seeking finance to grow:
1. Look ahead. When you’re running a business, we are conscious many entrepreneurs have to focus on the day-to-day to succeed and thrive. With finance, stretching that thinking and looking to the future makes a big difference, enabling you to identify the opportunities and challenges you’ll encounter and the finance needed to manage them
2. Be specific. When looking for finance be clear on the amount you need and what you’ll use it for, create a plan that demonstrates the impact it will have on your business
3. Research the options available. There are a range of products available and there will be ones more suited to your needs, from guarantor loans, property loans and cash flow finance – understand the basics so you’re equipped to make the best decision
4. Know the numbers – behind your business now and where you want them to be. This will help you to understand the path to growth. If numbers aren’t your strength, seek the advice and support of experts who will teach and guide you
5. Consider all options. Don’t feel you have to think ‘traditional bank’ first – similarly to personal finance there are lots of options when looking at business finance meaning you can find the best provider for you