Financing a business

1. How far ahead should we be looking, in approaching anyone for money to get the business off the ground?
2. Is it better to raise all the money we need for the initial period, plus a 'cushion', or to ask for enough to get started initially and then come back when we have six or 12 months' trading experience?
3. Relatives are offering to finance my new business. Should I accept the money as a loan, or as equity capital?
4. We have friends and relatives wanting to invest in our business. Should we give them normal shares, or special/preference shares?
5. The bank wants me to take out a term loan, rather than an overdraft, to help finance my business. What is the difference, legally and practically?
6. What happens if I cannot keep up the instalments on a term loan?
7. What issues should I look out for in an equipment finance, lease or purchase agreement?
8. The bank wants me to give a personal guarantee on my business borrowing. What does this mean?
9. The bank says my wife must see a separate solicitor about them securing a business loan on our house. Is this normal practice, and what happens if she refuses?
10. If I just need overdraft facilities for trading purposes, do I have to give the bank a personal guarantee?
11. What is a fixed charge?
12. What is a floating charge?
13. Our business has been slower to come into profit than we expected, and we need to raise more finance. What are our options?
14. We have been in business for three years, and need cash for expansion of our production facilities. What do you advise?
15. The bank has a fixed and floating charge over our assets, which far exceed the value of the loan. The bank will not lend more, but another company would - if we could offer security. What can we do?
16. Can we offer employees the chance to invest cash in the company? Alternatively, can we come to an arrangement under which they take shares instead of pay? Are there any tax advantages?
17. We need funds for expansion. A bigger company is showing signs of wanting to help, but we suspect they merely want to investigate our success. What would you advise?
18. We have been approached by a bigger company with an offer of funds, but we are worried about being gobbled up. What precautions can we take?
19. What is corporate venturing?
20. What is an exit strategy, and should we be thinking about it before we even start up in business?