By John Jardine, LB Corporate Finance

These are trying times for business leaders.

The banks may have turned the corner and be on the road to recovery, but the rest of the economy is still suffering. Britain has entered what looks likely to be a long and deep recession, and credit is still hard to come by. The banks may be lending again, but firms are finding it difficult to access finance they need. The reason is simple - banks are more cautious about lending than they were this time last year.

So where else can companies go to get the cash they need?

Venture capital trusts are one alternative. Businesses often steered clear of them in the past. In return for their investment, they expected a stake in the business and a seat on the board. Some set what people saw as unreasonable targets for annual growth.

While this may still be the case in pure venture capital situations, some trusts now offer alternatives that directors will find much more acceptable.

At LB Corporate Finance, we work with three such organisations. They take a longer-term view, investing in businesses that have experienced management teams, a track record of profitable growth and sound business plans based on robust forecasts. They are prepared to inject £500,000 or more into companies they view as low risk and that have some form of security available. The fact that finance is offered on an interest-only basis makes trusts an attractive source of funding in some situations - when cash flow is a concern, for example, as it is for many at the moment.

Another option is the Capital for Enterprise scheme. This is part of the Real Help for Business programme the Government announced in January. Managers have just been appointed to operate the scheme, so funding will soon be available. The scheme has £60 million to invest and companies can apply for amounts between £200,000 and £2 million.

Again, it's an offer that some businesses will find attractive. To qualify, firms will be going concerns with solid track records. They will operate in growth markets, earn strong margins and hold strong defensible positions relative to their competitors.

In both cases, 'small print' applies, so firms are likely to need professional advice before they submit proposals.

For more information please contact John Jardine at LB Corporate Finance. Tel: 01206 867551. Email: john.jardine@lbgroupltd.com.