How To Get Business Funding
Written by: Jonathan Gilbert
The Entrepreneurial boom that Covid has created over the last 18 months has been nothing short of extraordinary. At our core, humans are a remarkably resilient bunch that will make the best out of any situation the world can throw at them.
So what brought this boom on? The stats from around the world point in the direction that there was a 60% – 75% hike in new business licenses acquired across the globe! Lest we forget the devastation that Covid brought to those in the entertainment and hospitality industry, it is clear that these industries needed to make another plan to put food on the table…hello start-up boom!
So how does one go about starting their own business? We all hear of the success stories but very rarely of the failure and stress that running your own company can bring. We’ve all had those dreams of being the next Apple or Uber, but how do you even begin? Where can you get the business funding needed to kickstart your soon to be fully operational company?
There are several avenues you can look at to kickstart your dreams, I would like to look at a few of the most popular and spell out what each avenue requires. Hopefully, this is the sign you’ve been waiting for to get out there and take the first step!
The Government’s Start-Up Loan Scheme:
The Start-Up Loan scheme is a government-backed personal loan of between £500 and £25,000 available to anyone looking to launch or expand a small business. You’ll need to submit a detailed business plan and cash-flow forecast to prove that your startup can afford the monthly repayments. The interest rate is fixed at 6 per cent per annum, and the loan can be repaid over one to five years.
An angel investor (also known as a private investor, seed investor or angel funder) is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. Angel investors are usually successful businessmen/businesswomen that have the knowledge to impart to startups. Some people prefer to go this route and deal with one person, however, it’s usually a better idea to pitch your startup to an angel investment network. Here’s a list of angel investment networks in the UK, each of which specializes in different areas, business types, and industries.
Venture Business Funding:
A venture capitalist is an investor who funds small startups with very high growth potential. A venture capitalist also plays a large role in the operation of the company, becoming associates or partners. Understandably, many startups won’t immediately jump at the idea of giving away a portion of their business, and bringing on an investor can consume a huge amount of time and energy but it is one way to get business funding. The British Venture Capital Association provides a directory of venture-capital firms operating in the UK.
Crowdfunding platforms are a great way for small companies to raise large sums of capital from a variety of minority investors, customers or lenders in a short time frame. It has become increasingly popular across the globe and is not just used to fund enterprises but also social movements, creative projects and more. Crowdfunding allows startups to not only simultaneously raise money and generate publicity, but also to gauge interest in a product and develop it as the business grows.
These are just a few of the paths you can take to get funding for your business. With all the negative news we have been exposed to over the last 18 months, it’s great to take a step back and pinpoint the areas where things are thriving. I see it as only a matter of time before these thousands of new businesses around the world begin to make an impact on the global economy. The opportunities to raise the capital to start your business are closer than you think and as someone that helps build these companies daily, I cannot wait to interact with all these new business owners.
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