Business Start Up Finance

Also read: Choosing a Name | Start Up Costs

Business Start Up Finance is usually in the form of a grant or a loan. The grant is likely to for specific purposes and are usually aimed at certain types of businesses. Start Up Loans are there to give you the finance you need but with manageable repayment rates.

Grants

Grants are given to businesses to help them with a project like product development or training; they can help a business get what they need in order to succeed. A grant will only cover part of the cost of whatever it is the business has specified it needs, the rest will have to be raised by the company itself, or if you are a sole trader by the individual themselves. The grant will sometimes be offered to cover a specified part of the overall project and cannot be spent on anything else.

You can also find grants are offered in particular areas and are not available in others, this is usually down to the fact that some areas are in desperate need of economic regeneration and new businesses are welcomed in the area to help with such things as employment. More information can be found on the DTI website.

You will find grants offered from varied sources such as;

The Government, Development Agencies, Local Councils and Authorities, The European Commission, Chambers of Commerce, County Enterprise Boards.

The Government also support some colleges and Learning, Development centres by making funding available to them. The Government sees research and development as important areas and it likes to encourage innovation so grants are made available in these fields.
There are schemes that have been set up in order to help support small businesses.

Training

The Learning and Skills Council provides grants for training and skills development.

Young entrepreneurs

The Prince’s Trust offers support to those people aged between 18-30 who have a good business idea It can help them to start up their own business. The trust can help anyone who is in low paid full time work or is part time employed. You can check to see if you are eligible for help by going to the Prince’s Trust website.

The New Deal

The New Deal has been set up by the Government; the aim is to help to get people back into work. You can find out more by going to the New Deal website.

Small Firms Loan Guarantee

The SFLG guarantees loans are available to UK businesses with £3m to £5m annual turnover, who have basically failed to secure a conventional loan because of their lack of security. SFLG guarantees is where the DTI usually guarantees 75% of a loan from a bank or other organization. They are run for periods of between two and ten years. Up to £100,000 is available but you could get more if your business has been trading over two years. As a condition of acquiring the guarantee you will have to pay the DTI a yearly premium of 2% on the outstanding loan balance. Any assets you have will have to be pledged for you to be eligible for the scheme.
You can find all the information you require on the DTI website, look for the SFLGS booklet.