You’ve done it: You’ve come up with your revolutionary idea and launched your own business. But to ensure the quality of your product and be able to grow your startup, you’re going to need funding. Let’s take a look at three ways to get startup funding in the UK.
Launched in 2012 to encourage entrepreneurship, theStart Up Loan scheme is a government-backed personal loan of between £500 and £25,000 available to anyone looking to launch or expand a small business. The interest rate is fixed at 6 percent per annum, and the loan can be repaid over one to five years. You’ll need to submit a detailed business plan and cash-flow forecast to prove that your startup can afford the monthly repayments—there are plenty of helpful guides on the startuploans.co.uk to help you—and if you’re accepted, you’ll be paired with a business mentor for 12 months.
There are a few startup-business grants available to new UK companies specializing in innovation across a number of fields, from technology to the arts.
This is one of the most popular ways to attract startup funding in the UK, with a range of platforms offering different models of investment. Crowdfunding gives startups an opportunity to not only simultaneously raise money and generate publicity, but also to gauge interest in a product and develop it as the business grows. Crowdfunding comes in two different types.
If your business is product-based, crowdfunding through platforms like Kickstarter and Indiegogo offers a way to ensure a healthy number of guaranteed sales before you even begin manufacturing. Not only does this give you the capital needed to get your startup off the ground, but when the investor’s reward is the product itself, you won’t have to give up shares in your company. Just make sure your pricing structure accounts for all of the hidden costs of producing and distributing your backers’ rewards.
Platforms such as Crowdcube and Seedrs allow you to raise cash by turning your supporters into shareholders. This is great for startups with a business that isn’t product-based, or for small companies that need to raise larger amounts of funding to expand. Investors on these platforms are given equity in your company, and so will likely invest more than a typical customer would.
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