Setting up your small business can be tricky without the right tools. That’s why we’ve put together some of the best grants and funds that are easily accessible for those who are looking to set up on their own!
1. Grants and loans for young entrepreneurs
There are business grants and small business loans available exclusively to young entrepreneurs. The Prince’s Trust Enterprise Charity Programme is a network of the UK’s leading entrepreneurs who are committed to supporting and inspiring the next generation of leaders. It has distributed more than £5 million in funding since 2010.
Crowdfunding has rapidly grown in popularity over recent years. It’s the practice of funding a project or venture by raising money from a large number of people who contribute a relatively small amount via the internet. There are a few places you can source crowdfunding, such as:
3. Business Incubators
Geared towards speeding up the growth and success of startup and early-stage companies, business incubators provide a good path to gaining some capital. With incubators, your business gets access to a variety of capital choices and a host of add-on benefits which can include networking opportunities, expertise, access to office space and meeting rooms and invaluable mentorship. Check out Seedcamp for more information.
4. Angel Investors
Angel investors are private individuals who are willing to invest in your business, accepting their investment comes with some risk but in expectation that they will see a return if your venture is successful. They usually fall into one of four different groups:
- Individual Angel Investors – this is arguably the trickiest route. Firstly, individual angel investors don’t know you and they don’t know your business – and they prefer to stay anonymous. If you know of an angel investor, try to figure out someone they know who can make a good introduction for you.
- Friends and Family – if you’re lucky enough to have friends and family who are interested in your startup and are willing to invest, then you’ve struck gold! However, make sure that your friends and family are aware of the risks involved with investing – they need to be aware that they could lose 100% of their investment.
- Angel Investor Networks – investors set aside funds for angel investments, so the individual angel gets to keep their anonymity while enjoying the comfort of a team sorting their investment capital for them.
- Fundraising Advisers – this is usually a last resort if you’re struggling with any of the above options. You can approach an independent start-up fundraising adviser, who will take on a client and attempt to sell their business to investors. It can be a little more expensive, however, with the adviser usually taking a 5-7% success fee.
5. SEIS (Seed Enterprise Investment Scheme)
SEIS is a tax relief designed to encourage investors to invest in UK companies. The relief allows investors to claim back up to 78% of their investment through tax in the first year. Many professional investors now require SEIS at Angel Stage before they even look at a company. You can apply for SEIS status with HMRC here.
6. Innovate UK Smart Grants
The Smart Grants scheme provides grants for start-ups with significant technological or scientific intellectual property grant funding. You can find out more information about innovation grants for start-ups here.
7. Innovation Vouchers
Innovation vouchers provide a small but useful Government grant to develop an innovative idea or new product by providing you with expert know-how. Innovate UK will help source expertise for your business from one of the following:
- IP Advisers
- Advisers on design
- Consultancies and catapult centres
- Technology and research centres
- Universities and colleges
Find out more here.
Remember, any loan or grant you’re interested in should be researched thoroughly before you make any commitments to ensure it’s the best possible solution for your small business. It’s also useful to network with other entrepreneurs and see what kind of routes they’ve gone down to fund their businesses.
Wondering how Brexit may affect your new small business in the coming months? Check out our Brexit Poll to find out what people think about a future separate from the EU.