There are various startup funding options available these days, we run down five of the most popular and easily accessible.
Friends and Family
Borrowing from friends or family is often flexible, cheaper and easier to arrange. The downside is that any problems or misunderstandings, regarding repayment, can potentially damage the relationship. Written agreements can reduce the risk of problems and also clarify who remains in charge of the business on a day to day basis.
It would be a good idea to speak to a Business Advisor at a local bank. This will clarify what support and help is available to you. To obtain a bank loan, you would almost certainly need to have some money available of your own to invest. You do not need to have a business plan available for your initial discussions but one would be required if you were to subsequently apply for a business loan.
Government Start Up Loan
Enterprise for London is part of a network of official Start Up Loans delivery partners across the UK who administer the government funded Start-Up Loan scheme. As a referral partner, we can help you get your business ready for finance. Enterprise for London will work with you to create a business plan to apply for a Start-Up Loan.
Crowd funding is fast becoming a popular route to secure business finance. There are tree popular types of crowdfunding.
- Reward – investors are given something in return for their investment,. For example a bakery may promise a free loaf of bread every week for a year in return for the investment
- Equity – investors would get a percentage of the business in return for their investment
- Debt – effectively loan funding whereby investors are repaid their investment at an agreed interest rate
The advantage of Grant Funding is that, as long as certain terms are not breached the money does not have to be paid back. Grant funding is usually only available for specific purposes and criteria. It is always worth checking to see what is available and if there is anyway your business can meet the terms of the grant. Click on the links below to see what might be available in your area: