City : Enterprise Centre : Finance and Funding
While writing your business plan you will have thought about budgeting and finance. You may not be able to finance your business yourself and generally speaking this is not a good idea anyway. Here are some of the options for places where you can find funding for your business.
Best for Private Funding: Banks / Building Societies
Private finance will involve a bank or a building society who will be able to lend you the money in order for you to start up your business. This route has advantages and disadvantages: bank terms and conditions, high repayments for example, you will be solely in charge.
Best if you've been turned down by a bank: Frederick's Foundation
This is a charity which offers finance and funding to individuals who want to start-up their own business and who have been turned down by a bank already. The charity also provides considerable support to your business along the way. In order to use their services you must have already been turned down by traditional private financing sources. Contact the 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 young people, either with start-up 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 or ask your advisor at the JobCentre.
Best if you have a slow growing business and want to pay low interest rates: Grants
There are some grants available for people wanting to set up their own business. Some grants mean you do not have to pay any funds back; others may have a lower rate of interest than traditional lending at banks.
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; maybe a family member or a friend. 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, however, there are also disadvantages; 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. There is a £100 million fund available to help support a new generation of budding entrepreneurs. Help could include low cost unsecured loans and quality business mentoring. There is information on how to apply here.