Starting a new business is an exciting – and daunting – process. One of the biggest hurdles all new enterprises face is funding. I.e. Where to find it, how to qualify, and how to navigate the often-complex application process.
It’s not always clear where start-ups and small businesses can find finance, and with different options, it can be challenging to find the right funding for your requirements and know if you’re eligible.
Many funding opportunities are tied to a particular industry, region, or element of a firm, such as creating jobs or implementing eco-friendly modifications. Grants may occasionally be used in conjunction with other sources of finance, including loans from banks, grantmakers, crowdfunding, and other lender schemes.
If you aren’t able to find a business through personal investment or through the help of friends and family there are alternative methods to look at.
If you have some savings, and a decent credit rating you may be able to access a start-up or business loan through the bank. You’ll need to check your eligibility and go through reference checks and potentially a lengthy application, but if you fit the criteria, it’s likely you’ll be granted the loan and will be able to set up a repayment plan over time.
In addition, crowdfunding has recently been a popular way to get the community involved to help fund businesses. Often, though, you’ll need to highlight the benefits of your business to your stakeholders in order for them to invest. It may be that it significantly improves the community, or has a direct benefit to those funding it such as a share in the business, or free or discounted products. But it’s worth looking into if you feel that it’s the right way to go for your business.
Alternatively, there may be business grants or government schemes which may be available for your business. These often come with specific conditions to meet, but there are lots of different options, depending on your business and the industry in which you operate.
The government has recently been committed to providing support finance for small businesses. They run several schemes targeting businesses at various stages of growth and across multiple sectors and regions.
One of the more popular schemes is the Seed Enterprise Investment Scheme (SEIS) which is designed to help a business raise money at the start of its trading operations. It does this by offering tax relief to your investors, mitigating some of the risk associated with start-up investment. SEIS can help you raise up to £150,000 in finance for your small business.
To support the government’s vision of the UK as a global frontrunner for innovation by 2035, InnovateUK is a valuable resource. Their platform encourages industry-sector networking and localises funding opportunities from various governmental departments.
For start-up loans, the British Business Bank is the first place many small businesses can look for finance. As well as offering low-interest personal loans between £500 and £25,000 geared to getting your company on its feet, they have partnered with the Open University to provide training courses in entrepreneurship, career and leadership, finance and accounting, project management, and sustainability.
The government and some banks also offer start-up loans and there are specific financial services companies too that can help you obtain a loan. These start-up loans often also come with mentorship and guidance for the first 12 months of your business, which can help you with your business plan and ensure you can make the repayments whilst growing your business.
Explore your Local Growth Hub’s network for support that’s a bit closer to home. The Local Enterprise Partnerships network (LEP) recognises the importance and significance of LEPs in fostering local economic development and prosperity across the nation. It represents LEPs as the primary national commentator and negotiator with the government, advisors, corporations, academia, and think tanks and serves as a central repository for data and information on LEPs on a national scale. They’re a valuable resource for funding news and opportunities.
Finding finance for small businesses can be challenging, but with the right resources, you can make the most of your business opportunities and see your company flourish.
For more business resources, speak to us here at Resolver, we have an excellent business suite of services aimed at helping you get it right for your customers.
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