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Funding & Finance

Funding grants

Accessing funding to start or grow your Berkshire business can seem daunting. Below you’ll find information and useful links on a range of finance options, from start-up loans and grants to equity, asset finance and crowdfunding.  

What should you consider when starting a business?

Running your own business can be incredibly rewarding financially, but it can also present risks. Many businesses do not create any income for several months after they start, and a large proportion also underestimate how long it will take them to turn a profit.

Before you commit, you should research your market to ensure your customers will really be willing to pay a high enough price for your service or product. Make sure you think of all the costs you’ll need to start the business and be realistic about how much money you will need to live on before and after you become profitable.

What should you consider when your business is up and running?

Make sure you closely manage your cash, and your profit and loss. Cash flow is the net amount of money moving in and out of the business. Check that you are making enough money to reinvest in the business and that you could withstand late paying customers.

What if your business needs to raise finance to start up or grow?

The most suitable finance option for your business depends on many things. These include how much funding you need, your current or potential revenue, whether you’re willing to offer personal or business assets as security, and whether or not you’re willing to sell shares in your business. Today, the choice of finance options available to small companies is now far greater than just the principal banks. For more information to help you find out how to access affordable and appropriate finance go to www.greatbusiness.gov.uk/finance or www.thebusinessfinanceguide.co.uk.

Types of finance and funds available include:

Bank loans

A loan is a traditional way of financing a business. You can apply for a loan from a bank. Always check the interest rates payable on any loan you are considering taking out and ensure you can pay it back in the agreed time.

Start-up Loans

A Start-up Loan is a government-backed personal loan available to individuals looking to start or grow a business in the UK. In addition to finance, successful applicants receive 12-months of free mentoring and exclusive business offers to help them succeed. The loan is unsecured, so there’s no need to put forward any assets or guarantors to support an application. All owners or partners in a business can individually apply for up to £25,000 each, with a maximum of £100,000 available per business. A number of companies administer the Start-up Loan. Click here for more on Start-Up Loans

Thames Valley Berkshire Funding Escalator

The Thames Valley Berkshire Local Enterprise Partnership (TVB LEP) has committed £11.3 million of capital to create a funding escalator of loans and equity across four funding initiatives managed by The FSE Group. If you are an ambitious SME based in Berkshire, already trading and with the potential to deliver high growth and employment opportunities, you may be eligible to apply. To find out more, please contact us on 01344 388005 or click here

Innovate UK funding competitions

Grant funding is available from Innovate UK for specific projects – a list of current Funding Competitions can be found here

Equity or investment finance

Equity (investment finance) involves raising money through private investors, venture capital funds etc. Equity investment involves selling shares in your business. The investor will take a share of any profits or losses you make. Depending on the terms of the investment, you might have to consult with them before you make certain decisions. However, you will not have to make repayments in the same way that you would if you took out a loan. Equity investment does not need to be repaid. If things do not go to plan and your business fails, the investors share the risk. Plus, investors often have knowledge and experience to bring to a business as well as their financial investment.

Private investors may choose to invest in your company through the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS). These are Venture Capital Schemes by HMRC to encourage private investors to support innovation. Investors receive a tax break as an incentive for investing in early stage companies. If you are looking to raise angel investment, getting SEIS/EIS Advance Assurance increases your chances of success. ‘Knowledge intensive companies’ can raise almost double the funding limit of EIS and have 10 years rather than 7 to do so. Many tech start-ups are eligible for this.

R&D Tax Relief Programme

This scheme was introduced by the government to support innovative businesses by providing them with a tax relief of up to 33%. Click here to find out the latest intelligence on key R&D schemes in the UK, including patent box and tax credits.

Asset finance and leasing

Leasing or renting assets such as machinery or office equipment can save you the initial costs of buying them outright. In addition, asset finance may have other benefits for your business (cash flow, tax, etc.)

Crowdfunding (or peer to peer lending)

Crowdfunding is a relatively new way to raise finance. It mobilises the power of the internet to pitch a business to a mass audience. This does mean a lot of marketing and awareness raising is required to generate interest in your business proposition. There are different types of crowdfunding. For example, there is donation crowdfunding, where individuals may donate funds to a charity, cause or community project, and reward-based crowdfunding, where individuals donate funds to support a business in return for a reward such as a discount, membership or tickets. There are a number of crowdfunding sites online including CrowdCube, Indiegogo and KickStarter.

Alternatively, there is equity crowdfunding, where individuals will invest funds in a business in exchange for a stake/share in that business. You will need to carefully consider how much you want to raise and what share of the business you are willing to give up. With crowdfunding you need to raise the amount of money you set in a fixed timeframe. If you don’t raise at least your target amount, you don’t receive the money. Equity crowdfunding sites include Seedrs.

What else do you need to know?

In almost all cases, where you seek outside funding, you will need a written business plan. You can find advice on writing a business plan and a free template here. A good place to start when thinking about your plans for growth is to attend one of our masterclasses on building a business model. We run these regularly and they are free to attend. Check the dates for the next workshop and other events here.

For any type of equity (investment finance or equity crowdfunding), you may need to consult with an experienced accountant to value your business, seek legal advice on any agreements/contracts and consider how you will keep your shareholders informed.

Would you like more advice on finance?

Call us on 01344 388005 or email info@berkshirebusinesshub.co.uk if you would like more advice on the options available to your business or attend one of our free events on finance and funding. In addition, if you meet the eligibility criteria for our High Growth Programme, your business adviser will be able to provide you with some advice about your options, put you in touch with funding partners, or help your business to become ‘investor ready’.

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