Mavis Amankwah
By Mavis Amankwah
According to statistics released from The Department of Innovation, Business and Skills on 26th November 2014, there was a record 5.2 million private sector businesses at the start of 2014, the first time the business population has exceeded 5 million. This is a record annual increase of 330,000 businesses (up 6.7% since the start of 2013).
There has now been sustained growth since 2000, with an increase of 1.8 million (up 51%) over the whole period.
At the start of 2014, 99.3% of the 5.2 million private sector businesses were small and 99.9% were small or medium sized (SMEs).
At the start of 2014, 5.2 million small businesses accounted for 48% (12.1 million) of UK private sector employment.
The combined annual turnover of small businesses is £1.2 trillion, 33% of private sector turnover.
There is definitely an opportunity for one to start and grow a business in the UK but there are also threats according to numerous research reports. One of the biggest threats of why one does not start a business is ‘finance’ - not having any or enough money to start and grow their business which puts many people off of starting at all.
Do not let money deter you from ‘making your dream become a reality’ or ‘turning your passion into profits.’
Here are some tips and websites that provide ‘funding’ in terms of business loans, equity finance, peer 2 peer lending and other financial options for those thinking of starting.
1. Type of funding you require
You will need to decide what type of funding you require as there are various funding opportunities that can range from securing business loans from a high street bank or other lenders beyond the bank, to equity finance, business grants (which may not need to be paid back) to peer-to-peer lending.
2. How much do you really really need?
When looking for finance and funding you will need to make of list of what you really need to get your business kicked off as well as looking at what you would need to personally survive (personal survival budget) until the business picks up. Most start-ups make the mistake of compiling a list of what they need to ‘kick-start’ but do not take into consideration how they will survive until the business picks up or has enough money to start paying you a wage or drawings which can take a bit of time. You need to be realistic and ensure that what you are borrowing, you can afford to pay back and that you have also put a contingency plan together for any ‘mishaps’ that may happen along the way.
3. Seek Professional Help
When looking to secure funding, always seek professional help as many people are not very clear on the various funding/finance options available to them and whether or not they fit the finance/funding criteria. Aside from this, read up on all financial options and have a clear understanding of each one so when seeking professional help you can get the right help as the criteria for securing a loan from a bank is completely different from securing funds from a peer-to-peer lender.
4. Cashflow Forecast
When looking at securing funding, ensure you factor in repayment costs and if you are going to secure any funding that needs to be paid back, ensure you add any interest or extra fees in to your cash flow forecast so that the lender can see you have made considerations for paying them back
5. Your personal credit
Many lenders do check your personal credit before lending especially if you are a new start-up or sole trader looking for a business loan. Ensure that you access your personal credit report on a regular basis as you could be turned down due to an adverse factor on your credit report that you were unaware of. Having access to your report allows you to monitor your credit ratings and any adversities that you may incur over a period of time which may help to clear up any issue quickly if you aware (depending on the stage of adverse issue).
Here are various funding websites specifically for sole traders, entrepreneurs, social enterprises and SMEs
Business Loans - http://gle.co.uk/
Peer to Peer Lending - https://www.fundingcircle.com/uk/
Research Grant - https://vouchers.innovateuk.org/
Grants for social enterprises - https://www.biglotteryfund.org.uk/funding/Awards-For-All
If you need assistance to secure funding or finance for your new or existing business please contact mavis@richvisions.co.uk or go to www.richvisionssb.co.uk for further information