Up to £100,000 in loan funding – Smart Team
The government have recently launched a new initiative that means your company could be entitled to a loan of up to £100,000.
If you’re planning to launch your business or have been trading for two years or less, you may be eligible for the funding.
Who are The Start Up Loans Company (TSULC)?
In 2012, the British Business Bank (BBB) were concerned about a perceived lack of entrepreneurial spirit in the UK. Still feeling the effects of the recession, growth in the economy had slumped, and it was clear to them that something needed to be done.
The BBB formed The Start Up Loans Company in order to encourage and support new and potential business owners across the nation. In the last five years, more than 45,000 start-up loans have been delivered to British businesses, helping them to launch and to thrive.
TSULC do not allocate the money themselves, but through localised delivery partners throughout the UK. These partners are the experts in their local economy, and so they can feed the funding to businesses they know will best benefit their region.
They also offer a mentoring service for all successful loan applicants. Guiding and advising you through the early days of running your business, these experienced business mentors will help you achieve your company goals.
How do I apply?
If you’re interested in the scheme, you’ll need to convince TSULC to invest in your company. Showing your business or idea is capable of turning a profit and has a realistic chance of surviving in the future reassures them that they will definitely get their money back.
Fortunately, companies that are already up and running won’t need to provide proof of every single sale they’ve made since starting trading. All the delivery partners will need to see is enough invoices to predict your annual turnover. They can then compare this with your own forecasts in your business plan.
If you’re yet to start trading, you’ll need to work a little harder to prove there is a demand for your products or service. This could be anything from market research and similar companies trading in your area to invoices and letters of intent to buy.
Whilst the viability of your business is extremely important, you’ll also need to sell yourself as a trustworthy and competent business owner. You and all your partners should make sure your CVs are up to date, and make sure you highlight any areas in your history that show your credibility and experience in your sector.
What should I include in my business plan?
The most vital part in your start-up loan application will be your business plan, and should include:
- A short summary of your company
- Descriptions of your products or services
- Who it is you’ll be selling to
- Proof that there is a demand for your service, in the form of invoices, letters of intent to buy or marketing methodologies
- The location of your business premises
- Market research into your sector
- Analysis of local competitors and how your business will stand out
- Details of your suppliers
- Realistic cashflow forecasts and profit/loss predictions
- The invoicing and payment methods you will use
- Any legal and insurance requirements
Getting your business plan right is absolutely crucial, so you may wish to talk to your Smart Team advisor before approaching a TSULC delivery partner. We can also help you to accurately prepare your cashflow forecasts and profit/loss predictions to support your application.
How much could I receive?
You could be entitled to a start-up loan of up to £25,000 per director at your company. TSULC provide loans of up to £100,000 when there are four or more business partners.
However, it is recommended that you ask for no more than you actually need rather than the maximum amount. A company whose cashflow forecasts only show a one-time need of £10,000 asking for £20,000 will instantly lose their credibility.
Make sure you know how much you’ll need, when, and why to justify the amount you ask for in your application.
When will I receive the funding?
TSULC are required to go through a process of due diligence before they can allocate government money for start up loans. Because of this, the application process can take up to three months to complete.
If you’re relying on the funding in order to continue trading, make sure you have enough cash in the bank to last you until your application goes through.
What will I pay back?
When you receive your loan, you’ll also benefit from a fixed 6% interest rate for the life of the loan. Unlike a bank loan which can vary with inflation and interest rates, with your TSULC funding you’ll always know exactly how much you owe, when it is due, and how long you will be paying it off.
Whilst the loans are to be used for business purposes only, they’re actually considered personal loans to each company director. With a normal business loan, if your company failed, the loan would die with it. In this case, however, you will be personally liable to repay your start up loan no matter what happens to your company.
Because of this, being accepted for the loan will depend strongly on yours and your partners’ personal credit history. Even the most impressive business plan could be rejected if one of you has bad credit.
What should I do now?
If you’re interested in applying for funding from The Start Up Loans Company, Smart Team are here to help you through every step of the process. Call us today on 01202 577 500 or email us on [email protected]