Although conditions are challenging for new business ventures this year with factors such as the pandemic and cost of living crisis playing a part, all hope is not lost…In total, there were 5.47 million small businesses in the UK during 2022 this accounted for 99.2% of the total UK business population.
As a result of these findings experts at Money.co.uk business have pulled together 8 ways to secure funding for your new venture:
Start-up grants
This is one of the better options for start-ups as you don’t pay the money back or give up a part of your business in return Charities, organisations and private businesses all offer grants, but the largest source of them is the government. Around 70 different government grants are currently available.
Grants can be paid in the following ways:
- a lump sum upfront
- a grant of the same size as your own investment
- you’re reimbursed after spending your own money
Local Government grants and resources
Local authorities often run grant schemes, which comprise support for people trying to get their startups off the ground. These can consist of cash advances or voucher schemes, whereby you’re given coupons or credits that can be cashed in at office suppliers, training courses and the like.
Business support networks are worth rooting out too. You might find them through your local library, university, Jobcentre Plus, as well as on social media networks, such as Linkedin.
Free mentoring, helplines and training courses on various aspects of setting up a business regularly crop up. These may or may not be better than paid-for courses – so check the small print and take a look at reviews.
Business grants
Plenty of companies and business-focused organisations offer grants and awards to up-and-coming firms, mainly because everyone benefits from a thriving society.
Competitions
Private companies sometimes run competitions to find the best young innovators out there. This is a great way of identifying potential client businesses or even presenting a deal that would see them enter into an agreement with the winner, à la Dragon’s Den or The Apprentice. For example, Worth Capital’s Start-Up Series awards £250,000 of funding to one fledgling business a month.
Crowdfunding
As social media phenomena go crowdfunding is one of the classier provisions. It’s certainly had a big impact on small businesses. Crowdfunding is ideal for attracting the interest of like-minded people all over the world. Through various platforms startups can receive a huge financial boost just by pitching their idea and waiting for positive responses.
Business loans
Business loans are offered by banks and other lenders who specialise in offering fixed-term loans, typically of 12 months. You’ll need to submit to a credit check and may be required to provide a business plan, depending on the size of your loan.
Overdrafts
A business overdraft allows you to make payments and withdrawals after your current account balance drops below zero. Overdrafts offer a short-term cash flow solution rather than a long-term budgeting option.
Credit Cards
Business and personal credit cards work in much the same way. But business credit cards tend to come with some additional benefits attached. These can include higher credit limits because expenditure is linked so closely to the running of your enterprise.
Unlike going on a spending spree for clothes or holidays, you’re more likely to keep outgoings in check, meaning the provider has a far greater chance of getting their money back, with interest.
Be sure to draft up a business plan before you explore funding. You will need this for a few of the above methods such as the government grants.
A business plan lays bare your strategy, explaining in detail how you’ll turn an idea into a money-maker. It should cover all aspects of a business, starting with a mission statement, which crystalises what makes your business idea so special.
