As the UK economy rises like a phoenix from the ashes, more people are beginning to see the benefits of creating their own business. It has been estimated that this year could see around 500,000 new business start-ups and this is set to increase year on year. The biggest hurdles for these new businesses are a lack of access to finance, lack of skilled employees and day to day cash flow issues.
Unfortunately for most small business owners, getting finance isn’t as easy as getting a meeting with a bank manager. The UK government has attempted to provoke the banks into lending more money to entrepreneurs by allowing them to borrow more money themselves however this still isn’t enough.
Small business grants
A good starting point for any business owner is the UK government business finance support finder. There are numerous grants available for different areas, industry and business size which could prove to be a valuable asset when starting out. Whilst the majority of the grants are relatively small and may not provide all the financing needed, some help is better than none.
Keep in mind that government grants are open to anyone who meets the criteria so ensure your pitch is as good as it can be. Grants can be easily accessed which also means they are a popular go to point for start-ups, do not underestimate the competition.
It’s not just banks that specialise in lending money to businesses. There are a vast amount of business finance companies that will provide you with short or medium term capital. Loans can vary depending on the provider, some companies are willing to lend over £250,000 with flexible repayment timescales. Online comparison tools exist to help business owners find the right alternative financing partner. It’s important to remember not one lender is the same as the next, if one provider turns you down it doesn’t mean they all will.
Crowdfunding is a relatively new concept that developed in the mid naughties. The theory is that a small contribution from a large number of people would have the same power as a large contribution from an individual party. Contributions can be rewarded in various ways depending on the funding platform, some use discounts from the invested company for any investor whilst others may give gifts based on contribution amounts.
Be warned, successful crowdfunding can be somewhat of a dark art. Unlike other forms of funding the pitch is aimed at the masses and the best projects are the ones which go viral.
If your business has strong growth prospects, angel investment may be the best option for you. Investors are usually wealthy individuals looking to invest in new ideas, as such they see the business as what it could be, not what it is at the moment. Attempting to find angel investors can be done by word of mouth or through online connection tools. Another benefit of angel investors is their knowledge, most are successful entrepreneurs and are willing to give advice to those who they have a vested interest in.
Ensure you aren’t left at risk by your business. Call Be Wiser Business Insurance on 0333 999 0802 or explore by industry.