Funding, Finance and Finding a Start-up Cash Injection

A surprising number of finance options to get your start-up off the ground 

How do you really get your business going when you’re limited by cash? That’s the pivotal question facing so many start-ups coming to the Business & IP Centre (BIPC) Sussex.  Some might have savings, some have friends or family who can help, but without real financial support, their business could remain a hobby or just a dream. 

Which is why it’s so gratifying when our BIPC team can instantly inform people of the many financial options open to both new and existing small businesses, for free! The only real question is, which direction is best for that business. 

So where do you start?

Step 1

Write a business plan and know your cash flow! Lots of start-ups worry about money, but it often comes from not knowing your numbers. Are you operating online, or on the high street? Are you a sole trader, or do you have a team? 

When you sit down with one of the BIPC team to work on your business plan, your costs and revenue will be considered. We recommend using the Business Model Canvas, as it’s very straightforward and clear way to plan your business. 

Then use our COBRA database’s Business Information Factsheet on writing a cash flow to really know your numbers.  Do you get muddled with the figures? Borrow one of our BIPC textbooks on bookkeeping to get a handle on things.

Step 2

On Universal Credit, benefits, or have financial dependents or extra pressures to take into consideration? Look up your situation on the Money Helper website (previously Money Advice Service) and find out if having two jobs or becoming self-employed might affect your benefits. 

If you’re on Universal Credit, head to Gov.uk for information on Help with moving from benefits to work, including assistance for the first 12 months.

Step 3

Consider your financial income options carefully. What suits one person will not suit another, and you will need to discuss & agree on your choice(s) with any partners/co-owners if you’re not the only business owner. We always recommend getting independent advice from a financial advisor too. 

What are your finance options?

Startup Loan

The majority of big high street banks offer loans to start-up businesses, as does the Government (British Business Bank). Make a list and scrutinise details of what each offer. Does the amount offered meet your needs? Is the interest rate reasonable, and does it increase? What other services, such as mentoring, are on offer for free with the loan – is there anything you need and would otherwise have paid for?

Investors

Perhaps you don’t mind divvying up portions of your new company/product for the sake of the finances to get it off the ground, and the expertise which investors can bring can often be a bonus. Have you heard of Angel Investors? They are individuals, often successful entrepreneurs themselves, who use their own money to invest in small businesses. In return, the investor will usually take a minority equity stake in the company. Sometimes, business angels invest as part of a group (syndicate). 

Crowdfunding

Kickstarter has really brought this option to the forefront in the past 10 years and there are now many different crowdfunding platforms available. Essentially, you list on an online public platform to call to the public to put up some cash to help you get started or fund a part of your business. The end goal has to be specific (i.e. we’re aiming to get £3,000 in six months to fit out our new shop) and you also need to incentivise the public with funding goals, such as a reward for anyone who funds you over £200 etc. Be aware that you must keep all your funding goal promises.

Alternative Loans and Funding

Have you been refused a loan before, or think you’ll be refused a start-up loan because of financial problems in the past? You still have financial options from Community Development Financial Institutions (CDFIs) in your area, who are there to help people refused financial assistance from banks. Head to the Responsible Finance website to see what the options are in your local area. 

Local Funding Opportunities

You can guarantee that there will be several funding opportunities – loans or grants in your local area. To discover these, contact BIPC Sussex, your Local Council, or search our COBRA database. For instance, here in Sussex we have the Invest4Grant, RISE Innovation and Green Growth Platform, to name only a few!

Grants

And finally, grants! If you’re not keen on finances with interest, this could be just the ticket. Use our huge GRANTfinder database to scour all available grants across the UK within minutes, and discover which you are eligible for, and what the application requirements are. Each organisation offering a grant will have different criteria for applying, so as ever, read the details carefully – and ensure you read the database’s invaluable help sheets on writing grant applications!

Get in touch with BIPC Sussex for more details on any of these options, to use our free business databases, or book a free one-to-one session with a BIPC Information Specialist.

Visit www.brighton-hove.gov.uk/bipc or email bipc@brighton-hove.gov.uk