“Will I need finance to set-up my business?” is one of the first questions a start-up business must answer.
This might be to fit-out a premises, wages to pay staff while they are training or buying equipment. There are many ways to finance a start-up business, and X-Forces provides access to one of the most popular – a government backed Start Up Loan. Here a quick intro to options open to entrepreneurs;
Own Personal Savings & Friends & Family
Business owners or friends and family often inject money into a start-up business either as a loan or by buying a share of the business. To avoid arguments, the key features of the arrangement should be put into a written agreement.
Start Up Loans
Start Up Loans is a government funded scheme providing advice, loans and mentoring to start-up businesses. They provide the opportunity to borrow up to £25,000 at 6% pa (fixed).
Start Up Loans
Credit cards are a regular source of finance for start-up businesses; They are often used for items such as travel, stationery, car expenses and are a good way of smoothing out unexpected bills, But allowing debt to get out of control will damage a business owner’s credit rating.
Saving in a CU (usually for a period of at least three months) will allow individuals to access lending facilities. The Association of British Credit Unions (ABCUL) website provides information regarding location of member credit unions and their services. Some larger CUs offer current account facilities.
Community Development Finance Institutions (CDFIs, now called Responsible Finance)
Community Development Finance Institutions (CDFIs) lend money to those unable to get finance from conventional lenders. There are around 60 active CDFIs operating across the UK.
The government website helps businesses search for grants including help with moving from benefits to work/self-employment..
The GOV.Uk website has a “Business finance and support finder”
X-Forces’ Case Study: Gecko Sportswear
“X-Forces gave me a simple and easy process for funding and great support both during the process and afterwards”
Jonathan ‘Bob’ Lovell started his bespoke sportswear range, Gecko Sportswear Ltd, after a 25 years in the Royal Signals and hasn’t looked back since. His wife, Helen is still serving and they call Haverfordwest in Wales home.
You can hear more of Bob’s story on our Youtube Channel: Bob Lovell
Register for X-Forces’ start-up and business planning support today through our website, www.x-forces.com or by telephone. Help for businesses can be obtained from ICAEW’s Business Advice Service. This is a free straightforward discussion with an ICAEW Chartered Accountant. Further information can be found at www.businessadviceservice.com
Article by Clive Lewis, ICAEW in conjunction with X-Forces.