Starting a business is always a pain. It’s stressful, hard work and downright frustrating. What makes it even worse is that the current economy is not exactly favourable to entrepreneurs. Banks are reluctant to lend and will only do so with some pretty sharp rates, while your friends and family aren’t in much better shape. So, if you need to find cash to get your business idea off the ground, where can you go exactly? There are a few options out there that are still available and here are two of the best.
The Startup Loans Scheme
Whether or not you believe the coalition has been on the side of small businesses, you can’t deny that there has been a hefty amount of schemes and plans that are meant to help out SMEs in this economy. The merits of each one could be debated for ages, but there is one that stands out due to its simplicity and straightforwardness. That is the Startup Loans Scheme.
With backing from business stars like James Caan, the Startup Loans Scheme proffers simply this: send us an application and if accepted we will give you some money to get your business going. This isn’t open to everyone unfortunately, just for people aged between 18 and 30, but that’s a pretty wide spectrum and it means capital can be given to those less likely to have it. The average amount awarded is £2,500 but it can be much higher depending on the situation. So, it might not be a huge amount but it can be enough to get things rolling or top off funding that’s already been acquired.
This is something that has gained in popularity over recent years. Essentially it is the ability for someone to collect funds from a large amount of people very quickly. In other words, rather than going to one person for £50,000, they go to 5,000 for £10. It’s a very simple idea and it has worked wonders for many people. It’s also a great way to build a reputation and a customer base before your business even gets going. It can be great publicity too.
There is one catch though. Only some projects are really going to be successful with this method. For example, if you want to start a company that makes online accounting software, it’ll be best to go another route. Crowdfunding works better for new ideas that are unique and interesting, or that fill a void. This is because this process can heavily rely on the project being spread virally. For example, this idea of a Cat Cafe recently reached its target, while this project for a tiny fish-eye lens camera is already starting to spread. If you have an idea that people within a community will want to spread, then crowdfunding could be a very quick and successful choice.
So, just because the bank is refusing you money, it doesn’t mean you can’t get cash from elsewhere. Look into as many options as possible. Just because the economy is rubbish doesn’t mean all new businesses have to stop. Do research, work out the risks and, if you can, go for it.
Joshua Danton Boyd is a copywriter who regularly contributes to Freelance Advisor.