Business Angel Funding - An Effective Alternative

With widespread media coverage of the so called ‘Credit crunch’ and the sudden reduction in the general availability of loans along with the increase in the cost of obtaining them from the banks many businesses are looking for different forms of funding.

Increasingly, ‘business angel’ funding is being sought as a very effective alternative, with experienced entrepreneurs being willing to invest not only their money but a wealth of experience into companies that are fundamentally successful concepts but in need of a financial turnaround.

Beer & Young are the market leaders in turnaround funding in the UK and despite the current economic climate have successfully completed a number of deals during the summer months which have given companies a new injection of cash.

One such company to benefit was a Midlands based franchisor that had only been trading for a few months and was showing enormous potential, however it had technical problems with the design of the vending machines; plus the franchisor’s original business partner had problems of his own, that meant he could no longer supply development capital for the business. As a result the sales of new franchises had ceased, vending income was slow in starting-up and the company was in dire financial straights.

Beer & Young were able to introduce a private investor who not only provided the necessary cash, but who also took a significant management role, to replace that of the former partner (who was bought out). The cash injection allowed the company to pay off its most urgent creditors, improve the product offering and, with the continued help of an IIB consultant, to restructure the rest of its debt, so that it could continue to expand at its former rate.