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How small businesses are getting start up finance

Raising funds to start a business has perhaps never been a particularly easy task, but post ‘credit-crunch’ the hurdles have been raised even higher as many previously available grant and loan schemes have ceased to exist. There is still start up funding to be had though, if you know where to look, but these sources of funding tend to be targeted on specific groups or sectors rather than being available to all.

Most people might think that a lack of start up funding is a bad thing of course, but too much money can also be dangerous – for example someone who has had a large redundancy pay-out may be tempted to rush into signing a lease for premises, or may buy expensive equipment or vehicles that they don’t really need because they feel ‘flush’ with funds. Neglecting to carry out basic market research and business planning and establish a viable business model just because you have what YOU think is a good business idea and the money is burning a hole in your pocket can be a recipe for disaster.

Whilst new businesses do of course need start up funding of some sort, if finance is hard to come by it sometimes means that only truly resourceful and determined entrepreneurs will set up in business and find ways to enable their business dream to become a reality.

So how are small businesses getting start up finance in this chilly economic climate? Where can they go and what can they do to be resourceful? In terms of grants, ex service personnel can apply to ‘Be the Boss’, a Royal British Legion funded business start up programme. Rural businesses and communities in certain specific areas can still sometimes obtain grant funding through organisations such as the National Parks. Young people up to the age of 30 can enter Shell Livewire’s business award schemes for a chance to win cash funding or apply to the Prince’s Trust for a start up loan.

Other providers of loan funds in the North East that assist people who cannot raise funds commercially include Street North East and the North East Micro Loan Fund. For people who have been unemployed for six months or more, the New Enterprise Allowance (NEA) scheme provides access to a loan of up to £1000 and weekly payments for the first six months after the business starts up which act as a financial cushion for the business owner whilst the enterprise becomes established.

If you fall outside these categories you can still be resourceful and fund your business start up another way. It may be possible to obtain a 0% interest credit card, now available for businesses as well as individuals too. Alternatively what about sourcing equipment free of charge through an ‘exchange’ website such as Freecycle.

Whatever your circumstances or business type, it is important to research your market to see what is available to assist you as you embark on your enterprise journey. Using your entrepreneurial flair will help you succeed and even in the current challenging times there is still support available,even if you have to look harder for it.

For more information about business start up services in Northumberland contact NBSL on 10670 813322 or visit our website at www.nbsl.org.uk

This was posted in Bdaily's Members' News section by Julia Weldon .