Raising operating cash for small ltd company

[o.versteer]

Hi all,

I'm looking for some help/suggestions/advice on how to raise cash for my company - this has been covered before, and recently, but I'm in a slightly different situation, which hopefully gives me plenty of options, I'm just looking for an opinion into what's best.

The situation is this:

I run a small niche publishing company (structure is limited company), specialising in automotive industry research and analysis. I'm currently about to start building a new revenue stream for the company, for which I need cash to invest. At the same time, I have a slightly tight cashflow situation at the moment. This is going to pick up in a few months, but I need operating cash now to keep plans going forward. Not paying myself for a couple of months would solve it, but is not an option as I currently am the sole breadwinner while wife is on maternity leave.

I only need to raise about £5k, which is not a lot in the grand scheme of things, so I have a couple of options open:

1. A business overdraft. This is no problem to arrange, but the bank charges a hefty setup fee and a high APR (10.7%) on any borrowings

2. A business loan. Again no problem, but again extortionate APR - 11.9%

3. Private loan. I quite like this option, as again it's easy to arrange, has a much more competitive APR (6-7%), and doesn't require me to sign personal guarantees and all that. However, I'm not sure how I can put the money into the business as a director's loan, and what the tax implications of doing that are.

So, er, that's it really. My question is:

- are there any other good options I haven't thought of?
- am I likely get a better deal on the business loan with another bank (that I don't currently bank with?)
- is the director's loan a good idea, and if yes, how would it work?

Thanks very much indeed for any thoughts/help offered, it's very much appreciated.

[o.versteer]

Fantastic, thanks for your insights into this. I thought that private loan / directors loan route sounded the most sensible way to go. Can't see why anyone in my situation would put up with the charges and general faffery of a proper business loan when this is so easily available!

Thanks again

[o.versteer]

As the original question poster, may I once again say thanks to all who have contributed, I'm constantly surprised at the level of knowledge combined with a willingness to help found here.

I'm now off to get myself a nice cheap loan, two fingers to my business bank (no names but they used to sponsor the Stewart F1 team, and in fairness are otherwise OK) and their 11.9% APR!