About The Book

Raising Start-Up Finance
Phil Stone

This book provides advice on the different ways of building capital, detailing the many sources of finance, such as business grants and business loans, as well as assessing the true cost of borrowing money...

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Book Contents »

 

1. Preface

2. Preparing Your Case

3. The Importance Of Your Own Contribution

4. What Can The Bank Offer?

5. Alternatives For The Purchase Of Assets

6. Using Business Resources To Gain Funding

7. Additional Sources Of Finance

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Additional Sources Of Finance

 

Always find out what help you can get before you start. Once you have established your business it may be too late and you will miss out.In this chapter, four things that really matter:The overriding principle for obtaining grants and other forms of financial assistance is that you must make your application and have the assistance agreed before you start your business. Unfortunately, a lot of businesses miss out because they do not follow this simple rule.

There is a substantial amount of help available to new businesses in both a financial and non-financial form. lt is absolutely essential that you research the position thoroughly. Some grants are reliant upon either jobs being created or investment in new plant and machinery. Others have no restrictions whatsoever and are available purely by making a simple application.

It would be impossible to cover all the forms of assistance available throughout the United Kingdom and it is up to you to find out what is available in your locality. What I can do is outline some of the types of assistance that are available to businesses in my own location, the North East of England.

Is This You?

I’m not creating any jobs so I won’t be eligible for anything, will I? • I can’t be bothered to apply, the forms are too complicated. • How can the Local Authority help? They don’t offer anything. • I don’t want anyone else having a stake in my business, I want total control.

Obtaining Grants To Help Your Business

Grants can come from a wide variety of sources, but in this section we will concentrate on the assistance provided by central government through the Department of Trade and Industry (Dti) and the Small Business Service.

The Small Business Service was established to help businesses and to represent their interests across government. It works closely with the network of Business Links in England, Business Shops in Scotland, Business Connect in Wales, and EDnet in Northern Ireland. These centres should be your first port of call if you are looking to start a business. Quite apart from the advice and guidance that they offer, they can also provide financial and non-financial grants to your business.

Financial grants from these business support organisations have, however, been substantially reduced in recent years and are only generally available in small amounts, somewhere between £100 to £250.The main provision of assistance comes in a non-financial form. Examples include help with:

  • Design and production of business cards and stationery.

 

  • Advice on putting together your business plan.

 

  • Guidance on market research and strategy for your proposed business.

 

Some of these take the form of training courses and others, such as design work, are undertaken by experienced professionals employed on a consultancy basis. In most cases, all of this support is offered free of charge.

Support is also available through these organisations on a subsidised basis where accredited consultants are employed to assist you and their fee is only partly payable by you. As an example, in Sunderland a 50% grant of up to £2,000 is available towards the costs of employing a professional to design your website. However, the support that will be available does vary widely and you must approach your local advice centre yourself.

Through the Dti, the government offers a number of schemes which can provide assistance in terms of either grants or awards. The main two grant schemes are:

  • Regional Selective Assistance (RSA)
  • Regional Enterprise Grant (REG)

 

Another example is the SMART scheme, which provides grants to review, research, or develop innovative new technology. All of these are subject to extremely rigid criteria and it has to be said that the application forms can be complicated. Within your local advice centre, however, there should be a person that can offer you advice and guidance in this respect.

The support available through the Dti is subject to constant review and change and you will need to check the current situation. The critical point to remember is that under normal circumstances, no expenditure must be incurred on the project related to the application before the grant is agreed.