City : Enterprise Road : Finance and Funding
How do I finance my business?
To finish your business plan you will have to think about financing your business and creating a budget.
You may not be able to finance your business yourself and, generally speaking, this isn't a good idea - it can be a real struggle to fund your business and pay your living costs!
Here are some of the places that you could find funding for your business and what they're best for...
Best for Private Funding: Banks / Building Societies
Private funding will involve a bank or building society who are able to lend you a specific amount of money in order for you to start up your business.
This route has advantages and disadvantages: bank terms and conditions can be complex, there are likely to be high repayments BUT you will be solely in charge.
Best if you've been turned down by a bank: Frederick's Foundation
Frederick's Foundation is a charity which offers finance and funding to individuals who want to start-up their own business providing they have already been turned down by a bank.
The charity also provides considerable support to your business along the way, not just money. BUT remember that in order to use their services you must have already been turned down by traditional private financing sources.
Contact Frederick's Foundation for more information.
Best if you are currently unemployed: The Prince's Trust
The Prince’s Trust can offer financial help to those 18 - 30 years old with startup business grants or grants to support you in developing your education.
If you’re aged 18-30, unemployed or working fewer than 16 hours a week and have a business idea, the Enterprise Programme can help you decide whether self-employment is right for you.
Contact Prince’s Trust for further information.
Best for low interest rates if you have a slow growing business: Grants
There are a number of grants available for setting-up your own business that either do not require you to pay any funds back, or have a lower rate of interest than traditional lending at banks.
If you are interested in setting up a Childcare Business there are specific grants available.
Best if you don't mind sharing your business: Investment Finance
Investment finance involves selling part of your business (known as a ‘share’) to an investor - this may even be a family member of a friend.
You can then invest their payment in to the business BUT the investor will take a share of any profits or losses that the company makes.
There are many advantages - the investor could bring a new skill set or experience and there will be no interest rates to pay - but also disadvantages - it can be demanding and you will have more people to consult regarding certain business matters.
Best if you want a Loan and Mentoring: Government Start Up Loan Scheme
Start Up Loans are part of a Government scheme to help young people thinking about getting into business and to support a new generation of budding entrepreneurs!
You can borrow from £500 to £25,000 with a fixed interest rate and get quality business mentoring to help kick-start your business.
You can get more information on the Start-Up Loans website!