Funding your idea
There are a number of schemes offering business start up funding at this present time.
Below are some highlighted:-
1. Benefit Claimants
New Enterprise Allowance Scheme, England
New Enterprise Allowance (NEA)
Jobseeker’s Allowance claimants aged 18 and over who want to start their own business can get extra help through the New Enterprise Allowance (NEA). This help is available from the first day of their benefit claim in most cases.
From 18 February 2013, lone parents on Income Support, from their first day of benefit claim and Employment and Support Allowance claimants in the Work Related Activity Group aged 18 and over who are receiving support form Jobcentre Plus, can also access NEA.
People taking part in Work Programme or Work Choice provision are not eligible for NEA as support with self-employment is delivered by their provider.
Disabled people enrolled in the NEA can now receive additional support through Access to Work to help pay for necessary specialised equipment, support workers and travel costs to get their business started.
Participants will get access to a volunteer business mentor who will provide guidance and support as they develop their business plan and through the early months of trading. Once a participant has had their business plan approved, ended their benefit claim and started trading, they will be able to access financial support. This will consist of:
- a weekly allowance worth £1,274 over 26 weeks, paid at £65 a week for the first 13 weeks and £33 a week for a further 13 weeks, and
- the facility to access a loan of up to £1,000 to help with start-up costs, subject to status.
The total package of support could be worth up to £2,274 to each participant who starts their own business.
NEA loans service providers
If a new business needs start-up capital, they may also be able to access a loan up to £1,000 to help with their start-up costs. Contracts have been awarded for the delivery of the loans service.
In the North West this is provided by Business Finance Solutions
How does the scheme work?
Firstly, you must discuss your desire to go self employed / start a business, with your adviser at the job centre, and they will refer you to a delivery partner for help and support to develop your business idea. In the case of Blackpool it would mean contacting the Get Started Team on 01253 477147. They will be happy to provide any training or assistance required with your plan and cash flow completion and onward submission.
Once your plan is ready to submit, this can be forwarded to the NEA scheme’s nominated partner, which in the case of Blackpool, would be Cumbria Chamber of Commerce.
The Chamber of commerce will review the plan and if accepted would make arrangements for any benefits to be paid (via the job centre) or if a loan is required (via Business Finance Solutions)
Further information can be found via the hyperlink below:-
2. Aged 18 -30 years of age
Please find hyperlink to site below:-
To assist you we have reproduced some of the content from the startuploans website, however, we suggest for a full picture, you should visit the site from the link provided above.
1. Have a passion:
Have you got a passion? An idea? A hobby that you can turn into a business? Is there a gap in the market that you can fill? Do you want to be your own boss? If the answer is yes, then you could have what it takes to start your own business. The first step is to get in touch with us by filling out a quick application form online giving us some basic contact information.
2. Make a plan
Once you have applied, we will identify the most appropriate Delivery Partner who can work with you to turn your idea into a plan. From workshops to advisors, our Delivery Partners will help you build the right plan that makes sense to you and your business (For more information contact Blackpool Council’s Get Started team. They can be reached on 01253 477147)
3. Present your plan
With the idea mapped out, your business plan will be considered for funding. We want your business to have every chance of success so the main things they will be looking for is confidence that your business plan makes sense and that your numbers stack up –Obviously with the help of the Delivery Partner, you should be in a strong position for funding!
4. Get going
When your plan gets the green light, you’re on your way to building your business. With the money in your own account, it’s time to put your plan into action and make things happen. In addition, you’ll then be able to access exclusive offers from our Global Partners including virtual office service, free accounting software and reduced fees with eBay and PayPal!
5. Meet your mentor
Every business that gets funded by Start-Up Loans gets assigned to a mentor who is on hand to help you succeed. You will have a lot of questions to answer and decisions to make – our mentors will be able to give you advice and guidance on what’s best for you and your business.
Q: What are Start-Up Loans?
A: Start-Up loans are loans aimed at young entrepreneurs. This scheme is aimed at 18-30 year olds, who are living in England and looking for finance to start a business.
Q: When can I apply?
A: You can register now to apply for a loan. When the loans become available in your region, your registration will automatically apply you for a loan. We have full coverage of all postcodes in England.
Q: How do I apply?
A: You can apply by clicking on the Register tab on the Start-Up loans Facebook page which will take you to our website form, or apply directly via the form at http://www.startuploans.co.uk
Q: Am I eligible?
A: To apply for a loan you should be at least 18 years of age (at the time of your application) and can be up to 30 years of age (when you apply for the loan), living in England, and interested in starting a business.
Q: What is the Application Process?
A: When you apply through Start Up loans, we will identify the right loan provider (Delivery Partner) for you, serving in your region. The Delivery Partner will then work with you to identify what stage you’re at in your idea process, and help you present your business proposal to a panel where you will pitch for a loan. If successful, you will receive the funding for the loan which will be administered by the Delivery Partner directly. Mentoring will be provided with the loan, and often during the pre-pitch process as well, giving you additional support and guidance as you go through an entrepreneur’s journey.
Q: How much can I borrow?
A: This will be agreed between yourself and the delivery partner. The average loan size will be around £2,500, this being provided by the government. However, the final amount will be determined by the business plan. There is no definite limit.
Q: What kind of loan is it?
A: The Start-Up loan is a personal loan, which means if 4 or 5 people from the same company apply for a loan, all are eligible for an individual loan up to invest in their business.
Q: If I receive a Start-Up loan, what are the payback terms?
A: You will be required to pay back the loan within five years at a fixed-rate of interest – currently 6%. Capital repayment holidays are available, but interest must be covered monthly throughout.
Q: Do I need a business account to receive a loan?
A: No – setting up a business account is not necessary, a personal account is fine. However, this will be to the delivery partners’ discretion, and they will help set up business accounts if necessary.
Q: If I already have a business set-up, can I still apply for a loan?
A: Start-up loans are accessible to anyone who had a business in its initial phase – no existing debt and without the infrastructure to deliver. There is flexibility in this, and we take a positive view on offering loans to existing start-ups.
Q: Will I receive any practical support?
A: In addition to your loan you will also receive business support and mentoring to help develop your idea, regardless of where you are in the development cycle.
Q: What else do I receive?
A: As well as the loan, business support and mentoring, applicants will also be eligible to enrol in resources from a number of our Global Partners, all of whom will be announced on our Facebook page and Start Up Loans website, and communicated to you once you have received your loan. These global partners include Regus, PayPal, and Intuit.
Q: What is included in the Regus Package?
A: 6 months free access to Regus’ Virtual Office Package and access to most of their business lounges across the world. In addition, applicants will also receive a free copy of the Start-Up Loans kit, which offers all the guidance you need to start a business, plus more than £500-worth of offers on products from business cards to websites, netbooks and work suits.
Regus UK: £20m of support, providing 30,000 young entrepreneurs in England access to its global network of business lounges and administrative support to help them succeed
Q: What is included in the Intuit Package?
A: 2 years of access to their online cloud accounting software.
Q: What is included in the PayPal package?
A: From the PayPal group, we have three exciting offers:
PayPal: Reduced transaction fees for six months (from 3.2% to 1.4%)
eBay: Three months free eBay store and no insertion fees
Magento Go: Six months’ free e-commerce package
Q: When will I be able to receive a start up loan?
A: Our Delivery Partners are active across England. Once you complete the form on our website you will be contacted by the relevant partner in your area.
Q: I have registered for a Start-Up loan but have not heard anything?
A: Since we announced the extension of eligibility up to 30 years, we have received a large number of applications which have been sent to Delivery Partners. You should be contacted within four working days of completing the form on our website. If you have not been contacted after four days, please email email@example.com and we will do our best to help you.
Q: Who are the delivery partners?
A: Delivery partners are points of contact who assist loan applicants with support to develop their ideas, and assess their business plan to decide whether the potential loan recipient is successful or not. Here is a full comprehensive list of our delivery partners http://www.startuploans.co.uk/where-can-you-get-a-loan/
Q: Will applicants be contacted for more details?
A: Yes – all applicants will be contacted by the most appropriate Delivery Partner. However, while the network of Delivery Partners is being put in place, all applicants will receive updates from Start Up Loans Company with news, information and offers through Facebook and Twitter pages, and by email.
Q: Who will be deciding who gets the loans?
A: Every Delivery Partner has their own arrangements for determining which entrepreneurs will receive loans, but the underlying criteria are set by the Start-Up Loans Company to ensure a consistent approach is followed across the country. In most cases the young entrepreneur will be expected to make a pitch to a panel. Support will be provided to applicants to ensure they are able to make the best possible pitch to the panel.
Q: What is the waiting period?
A: This may vary, but from the point of application to hearing back, it is 4 working days (working days do not include weekends or public holidays).
Q: How will the loans be handed out?
A: Loans will be transferred to the applicant’s business bank account. The Delivery Partner will help the young person open an account if they do not already have one.
Q: I’m an International Student, living in England, between 18 – 30. Can I apply?
A: If you have a Tier 4 visa then you are not eligible to apply for a Start Up Loan as self-employment is excluded. If you are able to secure a Tier 1 Graduate Entrepreneur visa then you may be eligible to apply
Q: What is the difference between a loan by The New Enterprise Allowance (NEA) and a Start-Up Loan?
A: The NEA loan is part of a package of support aimed at helping people on benefits to start their own business, which includes business mentoring support to help participants develop a business plan. You can only apply for an NEA loan if you have been on the scheme and had your business plan approved. A loan from The NEA is capped at £1,000, with a higher interest rate than a Start-Up Loan and is paid back over three years. A Start-Up Loan, on the other hand, does not technically have a cap on the loan size, and has a lower interest rate (6% nominal which equates to around 6.2% APR representative). Further information on The NEA can be found on the DWP website: http://www.dwp.gov.uk/adviser/updates/new-enterprise-allowance/.
The decision to take out a Start Up Loan is ultimately the individual’s. Our Delivery Partners are well placed to provide you with advice. The Start Up Loans Company would always encourage individuals to receive independent financial advice when making decisions to take out a loan.
Q: Do I lose my Job Seekers Allowance if I receive a Start-Up Loan?
A: Yes – this is most likely
Q: Can I receive a Start-Up Loan if I have a loan from The New Enterprise Allowance?
A: The NEA scheme and the Start Up Loans programme are mutually exclusive packages of support offered by government to help people set themselves up in their own business. The individual elements of those packages are not interchangeable.