From Lawpack's Working from Home.
If you don't have enough money to kick-start your business, you may need to raise some. Here are some ideas for sources you could approach:
- Your family.
- Your bank.
- Small Firms Loan Guarantee. This scheme allows you to get a loan from a normal high-street bank without giving personal guarantees; the government acts as the guarantor. Loans are available from £5,000 to £100,000 (repayable between two and ten years). After two years' trading the loan guarantee can be extended to £250,000. You only need to finance security to cover 25 per cent of the loan - the government guarantees the remaining 75 per cent. In return for the guarantee, the government charges you a premium of two per cent a year on the outstanding amount of the loan.
- Leasing and hire purchase. However, beware of the pitfalls; for example, under a lease or HP agreement, you are committed to a certain minimum period of monthly payments and if you want to end the contract early, there will almost certainly be a penalty to pay.
- Venture capital - again there are pitfalls, such as those who provide the money will want to keep a close tab on how their investment is performing and you may not like them interfering too much.
- Grants from Business Link. This organisation, an agency of the Department of Trade and Industry, provide general information and advice free of charge to anyone setting up in business, and if they don't know the answer to a particular problem, they will know who to refer it to. For example, you may want to know what sort of grants are available for your particular venture and Business Link are more than likely to have the answer on whom to contact, at its fingertips. Call its helpline on 0845 600 9006 or visit http://www.businesslink.gov.uk/.
- Pension funds and insurance companies.
- Others - the list of individual organisations is very long.