Guest blog: Bypass the banks to grow your business

Anita Brook is founder of Accounts Assist, a growing firm of Chartered Certified Accountants specialising in accountancy and taxation services for all types of small businesses, freelancers, contractors and consultants. In the second of her blogs for FMWF, Anita looks at the ways you can bypass the banks to grow your business.

Whether you’ve just taken the leap and branched out on your own, or fancy expanding an existing business, you probably need some financial support to get things moving. Banks have battened down the hatches since the recession so it’s harder than ever to get a loan – there is help available however, with a variety of funding streams and support for SMEs.

Start-up support

If you’re just starting out there are a range of support options, however grants are almost always rewarded for a specific purpose or project – not ones that have already started. In many cases you may also have to put your hand in your own pocket, matching any funds given.

The main groups that award grants are:

• The Government
• The European Union
• Regional Development Agencies in England, Scottish Enterprise, the Welsh Development Agency and Invest Northern Ireland
• Local authorities or local councils and local development agencies

Different grants are available depending on your location and type of business. Some grants offer financial assistance, while others provide free or subsidised services, ranging from advice through to practical involvement with projects. Before you apply for a grant you should make sure that you meet the conditions of the scheme. Information about all types of funding can be found at www.BusinessLink.gov.uk.

Competition for funding is fierce, so once you’re ready to make an application, get some help from your local Business Link advisor to give yourself a better chance of success.

Local government grants

Local government grants tend to range between £500 and £1,000, but in some cases businesses may apply for multiple funding. If you’re based in an area undergoing regeneration, there is likely to be more money available – East London, where the Olympics is taking place, and parts of the North of England have more money set aside to help small businesses.

Community Development Finance Initiatives (CDFI)

There are more than 60 CDFIs in the country, organisations that provide loans and support to businesses and individuals. The sorts of loans available are dependent on the region and CDFI. Visit www.cdfa.org.uk for information about your area.

While these are loans and not grants, and they do have an interest rate, unlike banks CDFIs don’t take into account your credit history, looking at applications on a case by case basis. All sizes of business are covered, from sole traders, to large, multi-million pound companies.

Skill support

Developing your business is not just about having extra cash – you need to make sure that you and any staff you employ have the right skill-sets to drive your company forward.

Train to Gain is a government programme designed to fill skills gaps in the UK workforce. The scheme covers businesses in all sectors, of all sizes and offers free training to bring people up to NVQ level 2 (the equivalent of five GCSE’s), with funding support for higher qualifications – managerial levels for example.

You may also be able to offset any training courses taken against your tax liabilities. The tax man will decide whether these expenses are allowed, dependent on whether the training is considered ‘wholly necessary’ to the running of your business. As with all expense claims, there are some grey areas, so get yourself a good accountant in order to improve the likelihood of making training expenditure tax deductable. To find out more about tax related issues, visit www.hmrc.gov.uk.

‘Green’ support

If you want to switch to renewable energy production, or cut down on your overheads by using more energy-efficient equipment, you can get zero-interest loans, between £3,000 and £500,000, through The Carbon Trust. There’s no arrangement fee and loans are repayable over a four-year period.

The Carbon Trust will review your business and put a plan together for the best approach to cut costs in an environmentally friendly way, the idea being that you pay back the loan with the money you save.

There is a wide variety of support available for businesses large and small, so if your idea is a good one and your business-plan sound, take a leap of faith and start-up or develop your business – possible even without the assistance of the big bad banks.

Click here for Anita Brook’s previous guest blog on cutting carbon in the workplace.

Posted by Anita Brook on Friday, March 12th, 2010 at 11:47 am.

Filed under Ask an Expert, Careers, Feature, Features, Personal Finance, SMEs, Starting a Business, Students, Tagged as: .