If you’re a small business owner or thinking of starting a business, money is probably your biggest concern. You may be wondering if there is any business money available when starting a business.
The simple answers is yes, but getting your hands on it is a complicated and rather stressful process.
There are countless schemes, each with their own set of criteria, which you can apply for when you are on the verge of starting.
Business money is out there to be claimed, yet every year we receive stories at Startups.co.uk of piles of cash sitting in accounts and not being invested.
It’s not because you don’t need the cash, it’s because navigating through the grants jungle can having wishing you still had your good job back.
All publicly funded schemes are designed to encourage new and growing businesses to bring wealth and ultimately create jobs.
To help achieve this government make available a portion of the taxpayer’s money to help and encourage enterprise.
This cash gets distributed through a variety of ministries, departments, agencies and quangos on a national and local basis and the good news is that most businesses are eligible at any one time to apply for a number of different business startup grants and support which in are distributed in a wide variety of forms.
This is a cash award, which is usually given out for activities such as training, employment, export development, recruitment or capital investment projects. With a direct grant most schemes require the company involved usually putting up around 50 per cent of the cost.
Under this type of scheme cash funding is offered for a project with the intention that the sums are paid out of future revenues. However if unfortunately the project fails, the grant is written off.
A soft loan is a special type of grant where the terms and conditions of repayment are more generous (or softer) than they would be under normal finance circumstances. So, for example, the interest rate may be less, or there may be no interest to repay at all, and the repayment term could also be for a longer period.
With equity finance a capital sum is injected into the business and the provider of the funds takes an equity share of the enterprise and (hopefully) when the value of the firm increases the stake can then be returned. However, unlike venture capitalists, the expectations and requirements of the providers of public funds are usually less demanding.
Startups can often find themselves in the situation where they are lacking a particular set of skills and there are some specially run schemes which offer to provide these either for free or at subsidised rates.
As with a lack of skills, it can be the case that small firms do not posses the physical resources or facilities they need in order to develop particular projects. In the same way there are a number of initiatives that can help overcome these concerns this by providing access to publicly owned facilities.
The transfer of technological advances and new best practice initiatives can often take a long time filtering down to smaller businesses. The government has set up schemes, which aim, through business support networks, to overcome this.
When it comes to research and development the cost involved can prevent small firms from tasking part, however, by sharing the costs with other businesses, and then sharing the resulting know-how, they can avoid this problem.
