Raising funds as a family owned business

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Family-owned businesses face a unique set of challenges, but raising funds should not be one of them.

Family Business Raising Funds

Family-owned businesses face an array of distinct challenges not necessarily encountered by other corporates. They often have a lot more to lose when making important decisions about significant capital spends, not least of which is navigating the delicate politics of putting personal assets up as collateral to raise funds.

Luckily, there are financing solutions available to help these businesses continue to grow and prosper.

Fund growth without the drama

For family businesses, generating funds for growth often involves the help of family members or putting the family home up as collateral. However, for some, this is not always an option - whether it's because the parties in question are already invested or they are not willing to use their homes as collateral to secure additional funds. Yet, many family business owners are hesitant to accept the help of external investors. According to a KPMG Global Family Business Service, 67 per cent cited fear of losing control as their main reason for avoiding equity offerings.

This is where a solution like equipment finance can lend a helping hand. Securing the latest and most advanced equipment is often a key driver of growth but the upfront investment needed for these purchases can present a major hurdle.By financing equipment with a non-bank lender, like Classic Funding Group, family businesses can maximise productivity and drive growth with the most up-to-date equipment without having to put their family home up as security.

The upfront capital expenditure requirement is reduced and the business pays for the essential equipment from cash flow that the equipment generates, without having to dip into the family’s coffer. This allows the family to use the cash reserves for other important projects such as advertising, training and seasonal staffing.

Asset rich but cash poor family businesses can also look at Sale-back as an option to raise additional funds and improve the lifeline of the business – cashflow.

Timing is everything

There is never a good time for equipment to fail, but Murphy’s Law would have it that if equipment fails, it is going to be at a critical time. The speed with which you can organise replacement equipment can have a significant impact on your family owned business’ reputation and profitability.

With most family business owners already working 24/7, arranging finance for new equipment needs to be quick and simple. Classic Funding Group offers a solution with ‘No Financials Required’ Equipment Finance for equipment under $100,000. Approval is naturally subject to credit criteria, term and conditions, so why not contact the team now and arrange a pre-approval?

Protect your family business from being affected by machine downtime, by incorporating a service and maintenance plan with the finance contract if offered by your equipment supplier. It might be a small price to pay for a peace of mind.

Or better still, upgrade equipment regularly to ensure that you only ever have the best equipment available.

Family-owned businesses face a unique set of challenges, but raising funds for growth should not be one of them. Contact the team at Classic on 1300 780 895 to discuss your needs.