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Financing a start up business

February 11, 2011 By admin

So you have a great idea. You have decided on a name. You have even completed the business plan. Ideally you have written the plan with the preferred investment option in mind but we all know that starting business costs money. This is often the hurdle that prevents a lot of new ideas from leaving the first base. Well depending on your idea, here are a few choices you can take.

Self-financing – Using your money is the most popular form of financing a start-up business. Even if you do seek a business loan you do need to show that you have some savings or self investment.   This is still a risky option and depends on the success of your business.

In order to pull this of, you will need to assess your assets. This could be; savings, property, vehicles and things that can be used as collateral for a loan. You will need to calculate how much you will actually need and aim to keep start up costs as low as possible. For loan options, credit cards are expensive but have been done before. You could also consider getting a mortgage or second mortgage. [Read more...]

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Enterprise Finance Guarantee

February 8, 2011 By admin

If for any reason a small to medium company with a clear business plan requires a loan, and is struggling to get one from a lender, there is a solution. The credit crunch has had an affect on most of. That is where the government Enterprise Finance Guarantee can help.

The loan guarantee scheme, run under Department for Business, innovation and skills provides lenders a government guarantee for 75% lenders exposure on non individual loans. If you can provide 25% collateral, the rest is guaranteed by the government scheme. Set up January 2009, the aim was to keep the economy running during the recession. [Read more...]

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Dragons Den

February 4, 2011 By admin

To start your own business is hard enough work as it is. Sometimes money just does not stretch far enough.  If you can prove your idea works and will be successful, venture capital may be an option for getting extra finance for your business. It is not an easy decision to make as venture capitalists will require up to 40% equity in order that when the business grows, but unlike a loan, you may not have to pay the money bank. Thanks to the wonders of television, we get a glimpse of how venture capitalists actually think.

Dragons Den is a BBC series that sees entrepreneurs and inventors applying for finance from five multi-millionaire investors listen to bids for support, they decide what they will take on, and if necessary will compete and bid for the products they like. The show has been on our screens for five years and in that time we have been given a glimpse of all sorts of inventions and ideas some very good and some that frankly need to go back to the drawing board. It is extremely hard as we notice to impress these millionaires but not impossible. [Read more...]

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Future For Start Ups

February 3, 2011 By admin

“Business is the driver of economic growth and innovation” is taken from Conservative Party website as they pledge to boost enterprise, support green growth and build a new responsible economical model. As there is an increase in redundancies and unemployment from cutting public sector, the need to encourage those in long term unemployment is ever present.

If you have not already heard, Conservatives and the coalition plan to wind down the existence of Business Link. As an online support and guide for those wishing to start their own business, surely it would greatly assist in what Conservatives would like to achieve. [Read more...]

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Business Finance

January 28, 2011 By admin

When starting and running a business, there are many different costs to consider at different times. To help along the way, various organisations help guide business owners with everything to do with business finance. It is important to get good advice and ensure you plan well; it could save you thousands of pounds.

At start up stage, the focus is on how to raise finance. It is essential to choose the right finance when starting up. Whether you self-finance your start up, get a bank loan, grant or are funded by venture capitalists; planning is essential. As the business grows, you should know your business well and be able to identify the right finance options. The best way to apply for funding such as a bank loan, venture capital or government grant is to use your business plan. [Read more...]

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Business Loans

January 25, 2011 By admin

A business loan is a bank loan that has been specifically tailored to the requirements of a business. Business owners will opt at any time to access cash this way for various reasons including, business start up, growth or business improvement. It is often possible to borrow between; £1000 – £25000 for 12months to 25 years. It is a very common way to get capital for your start up or extra money for a project. It is however not always easy and business owners have to be prepared when applying for a loan. [Read more...]

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Angel Investment

January 21, 2011 By admin

Aside from using savings, selling some assets or applying for a business loan, there is another way to raise capital for your business start up if you are lucky enough to get it. Business Angels are affluent individuals that invest in business start ups with great potential in return for equity and a share in ownership. The advantage of this is that although you are selling a part of the business which may hurt greatly, it is not like a loan hat you need to repay and also a business angel often provides expertise in the area or sector.

Business Angels, working alone or as part of a syndicate or group invest between; £10,000 – £750,000 on an investment and are crucial to the growth of new businesses in the UK and even the world. [Read more...]

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Venture Capital, Business Finance, and Angel Investment for small business

January 18, 2011 By admin

A brief and general explanation of Venture Capital is the financial and funding setup from the early stages of starting a business as well as business in new turnaround situations.  Generally it can be a high risk investment but a Venture Capital can provide a higher than an average return. A person who takes care of and makes these investment decisions is known as a Venture Capitalist.

The typical role of a Venture Capitalist would be overseeing the funds used from a Business to start getting the Business on track and going. The Venture Capitalist will also try securing and arrange other finances from other sources and investors.  They will also keep an eye over proposed business plans and often reform and revise the initial plans and strategies to what they feel would be the most effective.

Another job of someone who works in Venture Capital is to hire and fire the key managers when they feel the situation is necessary. They also find other supporting business companies and contacts and buy current owners when the chance presents itself in the right situations. [Read more...]

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