Money is one of the main concerns for any small business owner looking to start-up on their own. For new businesses, there is financial help available. However, the application process is often very complicated and can be a stressful process.
There are a number of different schemes available to budding entrepreneurs and each of them has a different set of criteria.
The government, local authorities and various groups within the community offer funding schemes to encourage new businesses to come to the area to help the growth of wealth and create new jobs.
Business Start Up Grants Explained
Business start-up grants can come in a variety of forms and can be put towards a variety of things relating to your business, from recruitment and training to partly funding the entire project.
The Direct grant is awarded to cover activities, including employee training, recruitment or capital investment projects. With this scheme, the business owner is responsible for raising 50 per cent of the cost.
There is, however, the option of a repayable grant. This type of cash funding is offered to new businesses that are confident that future revenues will cover the repayments. From the outset, this seems like a dangerous route to take. However, if the business venture fails then the grant is written off.
Getting a loan from a bank can often seem rather daunting to a new business owner, especially if the business is still in the pipeline. A soft loan, however, is a special grant that has more generous repayment terms. These terms may come in the form of a lower interest rate, for example.
Another option would be equity finance. This basically means that a significant amount of capital is invested in the business in return for an equity share.
The hopeful outcome would be that the value of the firm increases by enough of a margin that the original stake can be returned to the investor. However, this form of public funding has fewer expectations and less stringent requirement than, say, that of a venture capitalist, an example of which you might see on Dragons' Den.
Business Training
It is often the case for a new venture to be in a situation where a particular set of skills are needed, either by the new employees or the employer. There are a number of schemes that offer training courses for free, and others at a subsidised rate.
Train to Gain was launched in 2006 and helped over 52,000 employers to improve the skills of their workforce with over 240,000 employees taking part in training before the programme was discontinued in July 2010. The funding available to these providers was doubled in November 2007 and plans have been made to further develop the service. It is hoped that the Learning Skills Council will be able to offer a skills brokerage to aid employers in their search for training in specific skill areas.
Train to Gain: A Plan for Growth was launched by Innovation, Universities and Skills Secretary John Denham and Learning and Skills Council (LSC) Chairman Chris Banks on 28 November 2007. A Plan for Growth sets out how more than £1 billion - around a third of the adult skills and further education budget - will be routed through Train to Gain by July 2011.
As well as the provision of more funding for a broader range of skills, the plan's key elements include the lifting of the funding cap for the best training providers, an increase to £30 million a year for small to medium-sized enterprises' (SMEs).
So, for example, if you were a Managing Director, Owner, Director or Senior Manager with direct responsibility for the leadership and development of your business, you could have received up to £1,000 of funded Leadership and Management training under Train to Gain.
New Deal was a government scheme that aimed to give people on benefits the help they need to get back into work. It was replaced by the Work Programme in 2011. Specifically, the New Deal programme offers advice, support, training, job preparation and more.
Through the New Deal scheme, employers were able to contribute to the future success of their company and tackle unemployment by employing staff that had undertaken the appropriate skills training through this programme.
This scheme was set up to assist people back into the workplace and in some cases Employers will be paid a subsidy for six months towards the cost of Employing a New Deal client. This will be £60 per week for an 18-24 year old and £75 per week for someone aged 25 or over.
The easiest way to find out what is offered in your region is to call your local council and talk through your needs with one of their advisors, you never know, you could be eligible for a grant that would save your company thousands.
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