Starting a new business often requires some initial funding, whether it’s to help with buying stock, renting premises or just day to day running costs. There are a number of options available if you are looking for financial help with a new business, the most popular being:
- Personal investment, from savings, family or friends
- Private investment, from individuals or an investment company
Beyond some element of personal investment, which nearly all new businesses require, loans are the most common of these options to get a new business off the ground. Many places offer new business start-up loans, including the big banks and building societies, but there is also a government scheme specifically designed to help young people who are interested in starting a business
The Start-Up Loans scheme has recently been extended, making £110 million available to new businesses over the next three years. It operates like a conventional bank loan, offering cash to help you start your business, which will have to be paid back. In addition to the financial support you also get free advice and services from the scheme’s partners, as well as your own business mentor for invaluable advice. Here are some key facts about the Start-Up Loans scheme:
- The scheme is open to anyone aged 18-30 living in England.
- The amount you borrow will be agreed with the lender (bank etc) but, on average the loans are around £2,500.
- A number of different lenders serve each region and you will be matched with the right one for you.
- They will help you create a business plan to present to a panel, who will decide if you are eligible for the loan.
- The loans are paid back over a period of three to five years on a fixed APR of 3% plus Retail Price Index (which is currently 3.5%).
- As well as the loan you will receive free mentoring and a range of offers on products and services to help your business.