Statistics from BusinessFunding.co.uk’s database – which tracks over 1,000 UK business funding sources – show the number of public sector-backed funding sources available to companies has shrunk by at least a quarter in the last year alone, and the number of grant schemes has shrunk by a similarly large amount.

Its key finding is that of the 286 public sector-backed funds it was tracking a year ago, 80 (28.0%) have since closed, with the North West particularly badly hit.

Similarly, on grant funding: of the 250 grant funding sources tracked that were active a year ago, 64 (25.6%) have closed. Here, nationwide schemes and those targeted at the South have been relatively protected, whereas those targeted specifically at the Midlands have fared badly.

With spending cuts progressing apace across a wide variety of business funding sources, this trend looks set to continue.

The research extends across the gamut of the BusinessFunding.co.uk database, which tracks the activity of over 1,000 funding sources, including almost all of the major equity investor organisations (venture capital funds and business angel networks) and hundreds of business lenders (from general business loan providers to specialist providers like invoice discounters).

With the evident decline of public sector and grant funders, UK start-ups and SMEs must diversify the range of options they look to when seeking funding.

The good news is that a wide variety of less-well-known funding sources do exist, from specialists such as asset-backed lenders and business cash advancers and from more traditional equity investors. According to BusinessFunding.co.uk’s research, these equity investors have provided funding over £500m into UK companies so far this year.

The BusinessFunding.co.uk website aims to help those businesses looking for funding but unsure as to their options find funders who are prepared to assist them.

Dr Stephen Bence, Founder and Director of

BusinessFunding.co.uk, says: “We were often being asked to compile lists of properly-qualified funding sources for a particular project or company. We found these tasks incredibly time-consuming because the information could not be found in one place – not to mention the complexity of the funders’ eligibility criteria.

“This is our solution to that problem: a comprehensive and detailed database of funding sources coupled with an easy-to-use online tool to help direct businesses towards the sources of funding and finance that are most suitable for them”.

Launch partners for BusinessFunding.co.uk include: Baker Noel Chartered Accountants, the legal firm Vincent Sykes & Higham, the Public Relations firm Presswire and the digital search agency Red or Blue.

It is doubtful that there are many companies who have not had to make cutbacks enough in their business without having to look at cutting profits too.

Increases in the cost of fuel and energy alone mean that customers should already be paying more for a product than they were 12 months ago, but in many cases these increases have been absorbed by suppliers desperate to take an order.

This is all well and good if the customer pays for the goods promptly and within your company credit terms, but what happens when the outstanding account isn’t settled on time and what options are available to a business to collect the monies owing?

Some years ago during the last recession there was a lot of talk from the government to outlaw bad payers who were causing many small businesses the same problem as they are now. Predictably, despite talking the talk little was changed at government level and the problem still exists.

No matter how much you need an order it has little value if you spend the next six months chasing payment and no value at all if that customer goes bust.

These are things that should be considered before accepting any order but particularly from a company that you have not sold to previously.

The minimum that should be done is to pay a small fee to have a credit check done, but even that maybe too little as the data available can often be out of date and is based on the history of the client.

In these uncertain times it is worth employing the expertise of a company that makes credit risk assessment of your potential clients for you. They will offer a range of credit risk solutions often tailored specifically for your business.

Their assessment will allow you to make a more educated and accurate decision about the likelihood of them fulfilling their credit commitments as well as the affordability of their order.

You will probably be given historical balances and account status codes for the customer and in many cases can receive update alerts to give you a clearer picture of your customer and be aware of any changes in their credit status.

Minimising the risk at an early stage is the most sensible and cost effective way of dealing with new and existing accounts and will undoubtedly pay dividends further down the line.

In an article on the BBC news site Knight reiterates the recent findings of the Bank of England’s Trends in Lending report, whose agents across the UK have reported that demand for loans from SME’s remains weak.

Despite UK banks lending as much as £500m to small businesses there are calls from some SME’s and their representatives to make more funds available.

Knight insists that adequate funds are available and that banks are committed to lend to viable businesses, after all the core business of the bank is to make a return for its customers by lending money to sound borrowers.

The report also suggests that similar to personal debt, many companies are attempting to pay off their debts rather than saddle themselves with more.

The crux of the article is that banks are prepared to offer finance at any level providing that the borrower is viable and can demonstrate the means to repay the money.

Historically in the UK  many small businesses have borrowed beyond their means and once saddled with an overdraft facility have simply attempted to increase the borrowing year on year.

This works ok in a normal or booming business climate, but during the financial crisis banks have had to become more aware of their own failings. Constantly increasing business debt to companies that do not have the facilities to reduce the burden is no longer seen as viable business to bankers and rightly so.

It is up to business owners to ensure that they have are viable and not bogged down in debt already before approaching the bank for increased finance.

More so than for many years, business borrowers will need a robust and sustainable plan for repayment of any monies lent to them, before the bank manager is likely to be interested in lending.

The Forum of Private Business claims that business owners are finding it more difficult than ever to access finance and indeed many report that they have had overdraft facilities cut, or withdrawn altogether.

In a separate survey the Federation of Small Businesses found that 25% of its respondents are unhappy with the support they are getting from traditional lenders.

Whatever way you look at it the traditional lenders that were rescued from the financial crisis by the previous government are still refusing to play ball with many small business account holders.

This is not always the fault of the banks of course as many SMEs are primarily sales orientated and will take an order at any cost, even when knowing that they may face a long wait for payment from the customer.

For these businesses collecting outstanding accounts is a secondary consideration that will never receive the same attention as obtaining an order.

There are of course other options to conventional banks when looking to finance the growth of a business and among these are Factoring and Invoice Discounting. Companies offering these services operate only in the business sector and should therefore understand your needs better than some of the more traditional lenders.

Factoring and Invoice Discounting are quite often considered to be same thing, this is not actually true and the basic differences are explained here.

Factoring is a process whereby a business sells its outstanding sales invoices or accounts receivable to a third party (Factor) at a discount, in return for immediate payment. This is a continuous process that ensures a regular cash input into the business each month and reduces the need to chase bad debts.

The Factoring company is then responsible for collection of outstanding accounts by providing a full sales invoice administration coupled with credit control and debt collection service, enabling the business owners to concentrate fully on growing the business.

Alternatively, an Invoice Discounting Company will lend your business money using the sales ledger as collateral, releasing immediate cash against sales on a regular basis.

The business owners retain full control of the sales ledger and remain responsible for the collection of outstanding accounts.

This article is intended as a very basic guide to Factoring and Invoice Discounting versus conventional banking in the UK for SME Businesses. Services in this sector are tailored to suit individual companies and anyone looking for alternative funding for their business should seek advice from the experts in this field.

If you own a small business you are always at this kind of risk, but it is a risk that you simply have to take in order to succeed. It could be anything – a flood, a deal gone wrong, an unavoidable difference of opinion, a stolen laptop or even an unfortunate occurrence to one of your employees.

Either way, the situation can be extremely difficult to handle both financially and emotionally for any entrepreneur no matter how experienced they may be. However, if you are covered by business policies such professional indemnity insurance, you can go a long way to putting your mind at ease in the knowledge that whatever happens to your newly developed business, there will be a safety net for you to fall back on.

When you take on the fascinating challenge of starting your own business it is simply impossible to monitor everything when you first start out. At the early stage of proceedings, where you are solely concerned about high profits and low costs, you cannot cover all the bases at once. Therefore getting good employers’ liability insurance and public liability insurance is critical in order to protect yourself should one of your very first members of staff suffer an accident.

Can you think of anything more damaging than getting a bad reputation as a careless boss early on in your business career? There isn’t much worse – especially as the progress of your business is hugely reliant on the power of word and mouth. If a personal accident happens to one of your employees in the work place and you are not insured, then this is the exact reputation you will get.

However, if an accident occurs in your workplace and you can get it sorted swiftly while keeping your employees somewhat happy, you can quickly gain popularity among your workers and that word can spread quickly. But what if things don’t go this smoothly? There is a trend rife in the business world – claims culture – where the rights of employees against their employers are getting ever greater.

As time goes on, it becomes easier for employees to have power over their bosses and to be able to sue for even the most trivial of mishaps. Entrepreneurs are becoming more and more open to this everyday and therefore must be prepared for it with a sound employers’ insurance policy.

What if you were to lose your first big contract – one you had relied on to fund your entire business operation? This contact is at this stage imperative to the success of your business and you have been through all kinds of meetings, negotiations and networking in order for it to come through.

From here you can look to expand – maybe you plan to hire an assistant or another salesperson, perhaps you’re looking to advertise some more. Your golden contract is signed and the future looks bright but then, through no fault of your own, it all falls apart as the company you did a deal with states that the service you provided was not what they were expecting and that it wasn’t for them anymore. What now? Where do you go from here? How do you finance your dream now your main source of revenue is gone?

Well, if you have professional indemnity insurance, you can be covered. Why this is so important to people starting up businesses is that, as skilled as you may be at your work, you are bound to make the odd mistake – despite your best intentions. As confident as you may be and as excited as you are about starting your own company, the execution of your delivery could well be, at times, somewhat patchy as you start to learn the tricks of the trade. Therefore, it is imperative to cover yourself for any mistakes you may make as you try to become better at trading and attempt to bring in more customers.

What has to be remembered in all of this is that if you choose to start up your own business in the first place, then you will be greatly admired. It is a wholesome operation that takes skill, nerve, acumen and a huge desire to succeed and there are few who have these traits all in one place.

However, as in anything in life, the challenge of managing your own organisation is what subsequently makes it so rewarding, for the benefits it can bring are enormous. Being your own boss brings so many perks including power, control, choice, freedom to express yourself in your work, the ability to decide when to do a job and when to be with your family. The list, it seems, is endless.

Britain’s most famous entrepreneur, Lord Sugar, has said on more than one occasion that it would take wild horses for him go back to having a boss. But, as is the case in any ambitious activity whether it is business or any other industry, all the hard work and all the bright ideas could all be unlocked in the blink of an eye. It is therefore critical that you acquire the right kind of business insurance to protect your obvious talents, your income, the wellbeing of your family and the dream of seeing your own business succeed.

One such issue could be the facility to make payments for day-to-day items without having to draw cash from your business bank account or petty cash tin.

Setting up meeting rooms, arranging travel, organising staff expenses, paying for working lunches and settling utility bills online -  these are just a few of the areas where a credit card could become invaluable. But what type of things do you need to consider when shopping for the right package?

A Lloyds TSB Business Credit Card can offer a number of flexible ways to make sure all of these overheads are dealt with in a timely fashion, as well as providing a facility that keeps the cash flow moving while keeping you in control.

For those who are reluctant to set up credit facilities a more suitable option might be the Business Debit Card. With this you can get access to money from any number of cash machines across the world and you can use the card online and over the telephone.

The third option available is the Lloyds TSB Business Charge Card, which gives employees the ability to sort out their own expenses. However, with account limits and card numbers set by you, you can maintain control of the company outgoings with relative ease.

In addition to all of this, small business customers who choose any of the above facilities will be protected by the Lloyds TSB ClickSafe service. This means that train tickets, stationary, hotels, events and any other online purchases are given a little extra security – which should give you greater peace of mind when using the web.

In the same way as you would enter a PIN number when using a credit or debit card in person, Lloyds TSB ClickSafe allows you to set up a personal password to confirm your identity when visiting internet checkouts. The option is also known as Verified by Visa and MasterCard SecureCode and is designed to address the growing need to use the web to pay for goods, with additional protection against card crime.

“The deficit reduction programme takes precedence over any of the other measures in this agreement, and the speed of implementation of any measures that have a cost to the public finances will depend on decisions to be made in the Comprehensive Spending Review. We will significantly accelerate the reduction of the structural deficit over the course of a parliament, with the main burden of deficit reduction borne by reduced spending rather than increased taxes.”

Chancellor George Osborne, who has announced an emergency budget for June 22nd, said he would outline plans on Monday for an initial £6 billion’s worth of cuts.

The coalition has plans to cut Ministry of Defence spending by 25%, while proposing private capital investment in the Royal Mail.

The Accord supports the introduction of a banking levy and the reduction of the bonus culture in the finance sector. Meanwhile it will be interesting to see if the coalition can succeed where the Labour government failed, in getting banks to lend money to businesses.

“There is an urgent priority that is getting lending going to small- and medium-sized businesses. That is an absolute urgent priority,” said Osborne.

Now is the time that many will be looking to transfer their debt from one credit card to another, to take away the pain of having to pay excessive interest on their credit card account.

While there are plenty of credit card comparison sites on the internet, choosing a new deal is by no means a simple choice. Despite our pleas for plain speaking and easy to understand terms, the credit card market still represents a minefield for those looking to transfer outstanding balances.

It is therefore very important to take stock of personal finances and ability to pay off the outstanding balance before making a switch to another provider, bearing in mind that if you cannot repay the balance during the interest free period, interest on the balance will be charged at the standard rate.

One of the best credit card deals around at present is the MBNA Platinum card, which charges an interest rate of 5.9% throughout the life of the outstanding balance, so even if it takes ten years to pay off, the interest will remain at 5.9%. This would represent a far better deal than many of the zero percent transfers on offer if you are unlikely to be able to pay off the card balance in a restricted time frame.

This comes out favourably against many of the providers offering, say 0% on transfer balances for 15 or 16 months and then reverting to standard rates.

These deals are not restricted to personal credit cards, as there are also similar offerings for professionals looking for a business credit card that offers a great deal along with greater online protection and chip and pin security on the high street.

The BCC say that a third of the businesses it has surveyed have reported that access to finance has become harder during the last three months, with 64% saying that the situation had not changed in that period and just 3% feeling there had been an improvement in obtaining finance during that time.

David Frost, BCC Director General said;

“Our latest survey results show that the biggest issue facing British businesses is still demand for products and services. It is clear that the huge sums that have been injected into the financial system by quantitative easing are still not reaching small and medium-sized businesses in anything like the scale required for business to invest for future success.”

The report suggests that while obtaining finance is a key issue in the current economic climate, the problem is far deeper seated with over two thirds of company owners reporting that ‘lack of customer demand’ was a far greater issue to the future of their business.

The BCC has urged the UK government to introduce measures to improve confidence among UK businesses and suggest that scrapping the planned increase in National Insurance contributions in 2011 would be a good start.