How does the government help new businesses?
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There’s a range of support that the UK Government can provide to your business, which can give you a leg up to build your startup into a successful company.
But it’s crucial to find out what’s available to you and decide which support would suit your needs the best. You might find specific help for your industry or location and different types to benefit your business.
This guide answers “how does the government help new businesses?” which includes:
- Loans
- Grants
- Advice
So how does the government help new businesses, and how could it benefit yours?
Loans
The first of the four options that make up the answer to “how does the government help new businesses?” are loans. These offer small companies the chance to get finance if they can’t from banks.
If you run a new business, you might not have a high credit score, meaning that other lenders turn down your application. That’s where the UK Government steps in with their approved loan schemes.
BCRS
If your business is in the West Midlands of England, you can apply for a loan between £10,000 and £150,000. The BCRS Business Loans are only available if you can prove that you’ve been unable to get one from banks.
The repayment period can be one to seven years, and a non-profit business lender runs it. Your interest rates may vary but it’s likely to depend on inflation.
Enterprise Answers
Similar to the BCRS loans, the government also approves the use of external lender Enterprise Answers. It’s also for companies who can’t get funding from banks.
The loans can be between £10,000 to £100,000, and they’re only available if your business is in either:
- Cumbria
- Yorkshire Dales
- North Lancashire
Grants
The downside to loans is that you need to pay them back, and when the repayments include interest rates, it could become a costly decision.
There are also grants available when it comes to “how does the government help new businesses?”.
These are often a more desirable option because there aren’t any repayments to make. They are often for businesses that can demonstrate a positive change in the economy or society.
D2N2
If your small business is in Derbyshire or Nottinghamshire, you can apply for a D2N2 Capital Growth grant.
It’s for companies that can prove that they have the potential to scale up, which would mean they’d add to the local economy in future.
The grant offers between £1,500 and £10,000, and you must spend it on specific capital purchases. These can include:
- Machinery
- Equipment
- IT hardware
Prince’s Trust
If you’re a young entrepreneur between 18 to 30, you can apply for the Prince’s Trust Enterprise Programme. It’s available across the UK for Wales, Scotland, England and Northern Ireland.
You can apply with your business idea to get £1000 to £5000. But you must not:
- Currently, work more than 16 hours a week
- Be on a gap year (time in between university)
- Graduate with an undergraduate degree in the past six months
- Hold a postgraduate degree (like a master’s or doctorate)
FEAST 2
Another grant available for businesses is specific to food and drink manufacturers. But it’s only for companies in Derbyshire, Nottinghamshire or South East Midlands.
FEAST 2 can provide grant funding for up to 25% of your production equipment from the European Regional Development Fund. It also includes support on product testing and how to label properly.
Advice
Sometimes you might find that the support you need in your business goes beyond funding. Another answer to “how does the government help new businesses?” is advice to point you in the right direction.
Expert guidance on your industry or specific areas of running a business, may be the perfect assistance for you to continue with your operation.
Be the Business
For mentoring and online support, any small business in the UK can apply for the Be the Business scheme. It’s either available over twelve weeks or twelve months, aiming to improve the overall performance of your company.
The scheme matches you with experts who advise you to overcome challenges and make the most of opportunities. If one-on-one mentoring is not for you, they also set up an advisory board session with a group of professionals.
CompeteFor
The race to compete for contracts can be a challenge, whether in the private or public sectors. That’s why buyers or suppliers who want to work on major infrastructure projects can sign up for the CompeteFor contract service.
It supports your business with guidance to apply for those contracts and can set you up with those who make the relevant decisions. The scheme acts as a link between your business and the groups you want to work alongside.
Start your business on the right foot
Launching a new business is no easy feat. Still, it’s essential to give yourself the best chance with great financial management. Your bookkeeping can help you make the most of a grant or ensure you can repay a loan.
That means that you keep an eye on the costs of your business and make sure you have the money available to meet them.
You don’t want to reach a scenario where your business misses out on sales if you can’t pay for something immediate like supplies.
Monitor your cash flow with Countingup
A great way to ensure you’re aware of your finances is to set up a separate business account. You can also pair that with one which offers you additional tools to help with your bookkeeping.
Countingup is a business account with built-in accounting software. The app has helpful features like cash flow insights which alert you of the money that comes in or out of your business.
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