When it comes to finding funds for business expansion more than half the battle is knowing where to look. If you imagine the lending market is like an ice-berg, above the surface there is about 10% of the entire mass of the ice berg. The remaining 90% remains unseen under the surface - the lending market is just the same. The peak you can see represents the "traditional" lenders such as high street banks and building societies. Everything else is often not so obvious and so you have to know where to look or find a specialist to guide you.

Two of the little known ports of call are the AIM and PLUS markets.

AIM

AIM or Alternative Investment Market was established in 1995 as the London Stock Exchange's junior market. Since then it's proved a popular route to capital for ambitious entrepreneurs intent on fast growth. Close to 1700 companies (over 350 from abroad) now trade on AIM with a combined market value of £108.1 billion.

The figures look good but it's not a cheap club to join. Most companies say the overall cost of floating on AIM can be between £250,000 and £500,000 in fees to advisors, plus a broker's commission on the money raised. In addition there is an additional £200,000 in fees and compliance measures to stay in the market each year.

In return however you'll get a listed company and the kudos that comes with it. It also makes additional funding through debt finance much more likely. AIM also owes its popularity to the tax breaks it offers investors and companies and the ease at which owners can execute growth strategies. AIM is often quicker for example than negotiating a venture capital deal and the owner retains more of the business. You don't need to show trading history, there is no minimum market capitalisation and you must have a nominated adviser (nomad) at all times, which means you have someone helping you every step of the way. The red tape, compliance and regulation are much less than its Full List parent although entrants are still bound by UK Company Law.

The attractions of AIM are significant and if you are seeking access to significant cash injection in a relatively short time frame then you may want to explore AIM more closely.

PLUS Markets