FundingThe biggest single issue affecting the establishment and growth of a small business is how to access capital to fund the set up and development of the business. Most businesses, at some stage of their business lifecycle, need to secure an injection of outside capital either to fund set up costs or to finance the expansion of the business. This section outlines the various options available. There are a number of different sources of funding to consider when starting up in business, including: The most obvious one! Nobody will believe in your business idea as much as yourself so you should be risking some money to help get it started. Just ask yourself….if you were not investing money in your own business and went to a bank to ask them for £10,000 to get started, do you think that you would be taken seriously? Unlikely! Bringing your own savings to the business will also help to reduce your start up costs, as it will cut out any interest repayments or arrangement fees, that you may have on a loan. back to top Smart Award Scheme The Smart award scheme, aims to help small businesses develop new products and processes to improve their competitiveness. The programme supports individuals and small firms to carry out technical and commercial feasibility studies over a 6-18 month period. The awards are set at 75 per cent on the first £60,000 of eligible costs up to a maximum level of £45,000. One third is paid immediately to the winners and the remainder is normally paid quarterly against claims submitted. Around 180 awards are made in the UK annually. Smart Micro Programme For smaller projects, the Smart Micro programme offers grant assistance of up to £10,000 to help fund the development of low-cost prototypes of products or processes which involve technical advance and/or novelty. For further information, please contact: Tel: 028 9023 9090 Fusion Intertrade Ireland Assistance is available to support three-way, cross border partnerships between companies, third level institutions (colleges, universities, research centres) and high calibre graduates across Ireland to facilitate knowledge and technology transfer for specified projects. Fusion is open to companies
For further information click herehttp://www.intertradeireland.com/uploads/pdf/Fusion2.pdf Contact: New Deal New Deal is a major element of the Government's Welfare to Work strategy. It gives unemployed people aged 18 to 24 and 25+ a real chance to develop their potential, gain skills and experience and find work. It is an opportunity for employers to utilise the untapped energies and talents of an important labour market resource. New Deal offers employers a major opportunity to invest in the future of their organisation, tackle skills shortages and help end the waste of unemployment. Employers, both public and private sector, have a key role within New Deal. They can:
Employers have the chance to recruit employees who are motivated, committed and prepared for work and there may be financial help to recruit and train them. For more information contact the local JobCentre/Jobs and Benefits Office and ask to speak to a New Deal Team Leader or New Deal Personal Adviser. back to top Enterprise Northern Ireland (ENI) Loan Fund The Enterprise Northern Ireland Loan Fund was established to make funding (from £1,000 to £25,000) more accessible to those starting or operating a small business, whilst also providing advice on financial management and business related issues. The Loan Fund is available to all small businesses in either start-up or development stages. The aim is to make funding more accessible to those starting or operating a small business and in support of the loan, to provide advice on cash-flow and other business advice. The Enterprise Northern Ireland Loan Fund can be accessed in each Local Council area through your local Enterprise Agency. The Loan Fund offers:
Click here for further details www.enterpriseni.com Princes Trust If you are aged 18-30, unemployed, have an idea for a business but can't raise all the cash you need, then contact The Prince’s Trust. With start-up support from The Prince's Trust, you could get:
You are eligible for support if you:
Click here for further details www.princes-trust.org.uk Aspire Micro-Business Loans Aspire is a not for profit, community organisation offering micro business loans from £200 up to £5000 for new businesses. Whether you are a sole trader, a partnership, or employ up to nine members of staff, and have been trading for 6 months (full or part time, even from home), Aspire will provide loans in order to help you grow. Click here for further details www.aspire-loans.com Aspire Micro Finance, 54 York Street, Belfast, Northern Ireland BT15 1AS Small Firms Loan Guarantee (SFLG) The SFLG guarantees loans from the banks and other financial institutions for small firms that have viable business proposals but who have tried and failed to get a conventional loan because of lack of security. Loans are available for periods of between two and ten years on sums from £5,000 to £100,000 (£250,000 if your business has been trading for more than two years). SFLG guarantees 75% of the loan. In return for the guarantee, the borrower pays Department of Trade and Investment a premium of 2% a year on the outstanding amount of the loan. The commercial aspects of the loan are matters between the borrower and the lender. To be eligible, you must be a UK company with an annual turnover of no more than £3m (£5m if you are a manufacturer). Many business activities are eligible but there are a number of exclusions. Loans are available for most business purposes although there are some restrictions. Click here for further information click here http://www.dti.gov.uk/sflg/ Zopa – Lending and Borrowing Exchange Zopa is a bit of a different way to borrow money to get your business started! Zopa is a place where creditworthy people who want to borrow money can get together with people who are happy to lend it to them. The rate that you pay is dictated by the liquidity of the exchange and how good your credit rating is. The unique part is that borrowers can choose to take a rate offered or to wait and see whether the rates drop. Loans through Zopa are available from £1,000 - £15,000. For more information visit http://www.zopa.com/ZopaWeb/default.aspx Banks & Building Societies There are many services that banks can offer to Businesses depending on their individual needs. It is always best to shop around for the best banking arrangements, and negotiate with a commercial manager to agree on the best terms for your business. Services, which banks can offer to businesses, include:
Some banks will offer free banking to startup businesses, for the first 12-18 months of trading. This will include
However many free bank accounts will still accrue charges for the following;
So be sure to clarify all charges with a commercial bank manager at the outset. Credit Cards One of the most common methods of recent years to help get a small business started has been the use of interest free credit cards. It is best to shop around for the best deals and look for the lowest interest rates, and any protection that may be included with the credit card in terms of loss or theft. A good starting point if using the Internet for your research would be the website http://www.moneysavingexpert.com. Credit Union A credit union is a group of people who save together and lend to each other at a fair and reasonable rate of interest. Credit unions offer members the chance to have control over their own finances by making their own savings work for them. Regular savings form a common pool of money, which in turn provides many benefits for members. The type of loan available depends on your local credit union. Normally customers will need to have been saving with their credit union for a period of 13 weeks before they can apply for a loan. Customers can then apply for a loan of twice the amount of their savings, up to a maximum of ten thousand pounds. Check with your local credit union to see what services they offer and their terms and conditions. Local credit unions: Ballyhackamore Credit Union Ltd 028 9047 1753 back to top What is Venture Capital? Venture Capital (Private equity) provides long-term, committed share capital, to help companies grow and succeed. If you are looking to start up, expand, buy into a business, turnaround or revitalise a company, venture capital could help. Venture capital is invested in exchange for a stake in your company and, as shareholders; the investors’ returns are dependent on the growth and profitability of your business. The investment is unsecured, fully at risk and usually does not have defined repayment terms. It is this flexibility, which makes private equity an attractive and appropriate form of finance for early stage and knowledge-based projects in particular. Will a Venture Capitalist be interested? Venture capitalists will look for high growth potential businesses that can distinguish themselves from others by their aspirations, innovativeness and potential for growth, rather than by their current size. As a rule of thumb unless a business can offer the prospect of significant turnover growth within three to five years, it is unlikely to be of interest to a private equity investor. This usually means that the market for the product will not solely be in NI or ROI. Venture capitalists are interested in companies with high growth prospects, enjoy barriers to entry from competitors, are managed by experienced and ambitious teams and have an exit opportunity for investors which will provide returns commensurate with the risk taken Questions to ask before approaching a venture capitalist:
If your answers are YES, venture capital is worth considering. If NO it may be that your proposal is not suitable for venture capitalists and it may take additional work on your behalf to make the proposal “Investor ready” For further information click here Irish Venture Capital Association www.ivca.ie back to top Halo: Northern Ireland Business Angel Network A “Business Angel” is a private investor who contributes:
To businesses with high growth potential. Most Business Angels find their prospective partners by chance or through previous business contacts. Halo will create the platform to introduce those who can and are willing to supply the right ingredients to those enterprises and entrepreneurs in need of such resources. For more information, visit: www.haloni.com back to top
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CLIENT TESTIMONIALS “Very happy with the training, I have learnt a lot and have gained the motivation to get started quickly” “Brilliant! learnt a lot due to extremely good trainer” I thoroughly enjoyed the course it was very informative. Both Marian and Debbie created a relaxed asmosphere in which to ask questions” “Everything on the course was really helpful and all the tutors were excellent. I would recomment it to anyone thinking of opening their own business” “All of it was good, and everyone had an opportunity to add value and contribute. It was very insightful” “The course was very informative and raised awareness and the importance of planning and it helped immensely overall. The handouts and experienced “tutors/visitors were extremely helpful” “This group and the training has exceeded expectation. My business idea is now a reality, thanks for your help” “”I found the sessions very useful and a big help to starting a business. It gave me insight into the business world and was very useful to meet other business people” “ The course came back to basics… areas which I had overlooked. It was very useful and would say this is highly recommended course. The booklets are fantastic and have everything that is required” “It was most relevant to have practical examples. Kenny is experienced In operating his own business, he was very enthusiastic and motivational. I really enjoyed the training sessions. Thanks for the help”
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