There are many funding options available to new businesses. Finding the right one for your business can seem like a mind-boggling task. Each avenue will have its own eligibility criteria for applicants, and you will need to have a clear plan of what you will be using the funding for.
From loans and grants, to crowdfunding and asset finance, there are options for all types and sizes of business for starting up, growth and support to keep running. Let’s look at some of the options below.
What is available now?
We will begin with business loans and grants. The difference between a business grant and a loan is that you will be expected to repay a loan over an agreed period of time, whereas you do not have to repay a grant.
Some grants stipulate that you need to match a percentage, or the whole amount offered yourself, so you need to ensure you have that money to invest at the time of application.
Questions to ask yourself
Having a good grasp of some of the fundamental questions about your business will help you with your funding application and will also help with choosing the right type of funding for you.
- How will your business perform over the next 5 years?
- What is constraining your future expansion?
- What return will an investment provide under different scenarios?
- How do you manage risk?
This is available to help you start or grow your business. It’s a government-backed unsecured personal loan where you could borrow up to £25,00 and repay over a term of 1-5 years. There are 12 months of free mentoring included here, which is extremely valuable to those just starting out.
They are a social enterprise, supporting SMEs, start-ups and early-stage businesses who have not been able to secure the funding they require from banks or other traditional sources.
Start Up Loans (trading under 2 years) range from £500 – £25,000
Enterprise Loans (trading over 2 years) range from £10,000 – £250,00
All applicants receive ongoing support from a dedicated, local Business Manager.
Start-up and New Business loans are also available from some high street banks, including NatWest.
You can check eligibility and apply online, where you will also find some helpful resources to make the application process easier.
Over 100 UK business grant options can be found on the Swoop platform, covering different sectors and business sizes. Some of the types of grants you can choose from here are:
- Innovation grants – Supporting innovative ideas and business growth, provided by a selection of funding bodies such as Innovate UK
- The National Lottery Heritage Fund – Prioritising projects that boost the local economy, lead to job creation and skill development. These projects can include anything that supports UK heritage, so think museums, parks, cultural traditions, rural and historic spaces.
- New Enterprise Allowance – Available for anyone 18 and over who is in receipt of, or the partner of someone in receipt of Universal Credit, Job Seeker’s Allowance or Employment and Support Allowance, or receiving Income Support as a lone parent, sick or disabled.
- The Prince’s Trust – Supporting people aged 18-30 to start and run their own business. Funding, training and mentoring available.
There have been a whole host of funding help options for small businesses and the self-employed throughout the pandemic from our local authority. Check the gov.uk website to find out what is available now.
Asset finance can give your business help to fund equipment, vehicles and technology it needs to run or grow. You can use it to obtain new equipment, or to release the value from the equipment you already own.
One company offering this is Close Brothers Asset Finance.
Crowdfunding can be used for start-ups or established businesses. The idea behind crowdfunding is that many individuals invest smaller amounts of money into your business in exchange for returns or benefits from the business when it’s ready. There can be different levels of returns for varying investment amounts.
If you are starting a business Crowdfunder are currently offering zero platform fees, meaning that more of the money raised goes towards your new venture.
Useful links for help and support
Whichever funding avenue you pursue, here are some helpful things to keep in mind:
- Each one will have different information you will need to provide so make sure you read the application guidelines carefully and gather all the information and documentation you need before you begin.
- The applications take time, so be sure to allow yourself plenty of time to complete and submit them before the closing dates.
- Some options offer support to complete the application. Check and take advantage of this if it is available for the option you choose.
- If you are unsuccessful in one, there are other options available to try. Some of the websites mentioned above have email lists you can subscribe to where you will be informed of any funding opportunities suitable for your business.