Shortly after the coalition came to power in 2010, they ramped up the pro-business rhetoric to almost deafening levels – the UK would experience an “entrepreneurial decade”, and we would be hauled out of the recession by an army of small business owners.
Eight years removed and with another government in place, the UK small business, freelancer and contractor communities have expanded rapidly. Over half a million companies incorporated in 2013 (the first time such a figure had been recorded), and by last count, there were over 4.8 million self-employed workers in the UK.
A handy side-effect of the entrepreneurial zeal sweeping the country are the business start up grants aimed at those preparing to start their own company. Here we round up just a handful of the available aid.
Nobody can seem to quite agree how to spell it (the official website says Start Up Loans, Gov.uk says Start-up Loans), but the government’s flagship SME financing scheme was an instant hit, with 1,820 loans worth £9.6m taken out in its first year.
In order to qualify, applicants must be 18 or over, and will work on their business plan with a mentor before pitching to a panel for their loan. The average loan is around £5,000, and must be paid back within five years.
A word of caution, though: in 2017 it was reported that the Start Up Loans scheme was plunging companies into debt. High risk, high reward, right?
New Enterprise Allowance
Another government-funded scheme, the NEA is designed to help the long-term unemployed back to work by helping them set up on their own. Applicants must be 18 or older, and receive one of the following benefits:
- Universal Credit
- Jobseeker’s Allowance
- Income Support and you’re a lone parent, sick or disabled
- Employment and Support Allowance.
A similar scheme to Startup Loans (you’ll get a mentor and some initial capital), the NEA also includes a weekly allowance of up to £1,274 paid over 26 weeks (don’t get too over-excited – £1,274 is the total amount, not the weekly amount) which you don’t need to repay.
You also get a mentor, who’ll take you through the business set-up process and offer you advice and support as you start to trade.
The New Enterprise Allowance is run through Jobcentre Plus – you can find out more here.
Rather than take a hefty loan from the government or a financial institution, Crowdfunding allows ordinary members of the public to back your idea by pre-ordering a product, by purchasing equity in your company, or contributing towards a low-cost loan.
You can credit the crowdfunder Kickstarter with the success of the Fidget Cube in 2016. Antsy Labs – run by Matthew and Mark McLachlan – originally sought $15,000 in donations to get the concept off the ground, but ultimately raised over $6.4m from 154,926 backers – nearly £41 per backer. Zack Brown had already made headlines in 2014 for seeking $10 on Kickstarter to help him make a potato salad, only to receive $55k in donations.
Most local authorities or sector-specific bodies now offer some kind of business development grants or support scheme. Everything from £5,000 for farmers and foresters to a freebie £250 for new businesses in the Merseyside area is up for grabs – check out the Gov.uk Finance Finder for schemes relevant to you.
In 2018, the government announced a new nationwide Gigabit Broadband Voucher scheme (GBVS), backed by a £67m fund. The initiative aims to provide vouchers worth £3000 for businesses to connect to the latest, fastest broadband.
This replaces the old Connection Voucher Scheme launched by the coalition government in 2013. Funding was pulled back in 2015, but the new GBVS looks like it’s here to stay. Check out the gigabitvoucher.culture.gov.uk website for more information.
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