18. Finance and support

What to do if you need finance for your business.

You may not need to seek external funding for your business, especially if you are investing your own funds or if your business has low start-up costs. On the other hand, for those who do require a start-up bank loan or investment, the first place to visit is The Business Finance Guide pages of the Institute of Chartered Accountants website. The guide provides independent, relevant and up-to-date information on the business financing options that may be available to you.

In the section entitled What Finance Options are Available?, you are asked what stage your business is at. There are five stages listed, but startups will be interested in: Start up not trading and Early stage pre-profit.

It also asks you what your plans are, and then offers some finance options including equity finance such as: seed finance, angel finance, equity crowdfunding and venture capital; and debt finance such as startup loans, overdrafts and bank loans.

Start up loan

The GOV.UK website states that you can apply for a government-backed start up loan of £500 to £25,000 to start or grow your business. You’ll get free support and guidance to help write your business plan, and successful applicants get up to 12 months of free mentoring. This is an unsecured personal loan and the programme is delivered by The Start Up Loans Company, a subsidiary of the British Business Bank. You can check your eligibility here. There is a fixed interest rate of 6% per year and you can repay the loan over a period of 1 to 5 years.

Start up grant

There aren’t many business start up grants, but you may be located in an area that offers them. Search the GOV.UK website for grants here and you can also find out about other types of support such as expertise and advice. The Startup Loans Company offers good advice about applying for grants and the Entrepreneur Handbook website has a comprehensive list of small business grants in the UK.

The British Business Bank also has its own Finance Hub, which helps businesses explore their finance options, prepare for investment and find a suitable government-backed loan.

Growth Hubs

Growth Hubs are local public/private sector partnerships led by the Local Enterprise Partnerships and offer support for small businesses. Your local growth hub can offer guidance and support, as well as information about local and regional business grants.

Further reading on this topic: ‘Finance Your Startup Business’ by Startup Donut also gives some excellent advice and is well worth reading. If you need to choose accounting software please read: Which Accounting Software Should You Choose?