Across the world, more and more people are choosing to follow their entrepreneurial ambitions and start their own business. The number of companies being incorporated continues to increase year on year, and the Coronavirus pandemic has accelerated this drive towards entrepreneurship.
During Covid-19, many people were let go of their jobs. Some were forced to find new ways of working which made them realise their desire to work for themselves. For others, the pandemic brought about new opportunities for products and services to enter the market. But with all this entrepreneurial spirit in the air, the all-important question of ‘How can I finance my business?’ arises.
In fact, a major factor that seems to be stopping many from pursuing their entrepreneurial dreams is the issue of funding. There’s no doubt that starting up a company is an expensive feat. WIth so many associated costs to think about, too many people’s plans to launch a business get put on hold. However, if you believe you have a brilliant idea and a solid business plan to back it, the issue of funding shouldn’t get in your way.
Here are some of the best ways you can fund your UK business in 2021:
Apply for grants for new businesses
In order to support British businesses and stimulate the economy, the UK government offers a number of grants for start-up businesses and early-stage companies. You can use the government’s website to find out what regional grant funding may be available to you.
The amount of money you could be eligible to receive depends on which grant you choose to apply for. There are also different grants available that are dependent on which region you live in. If you choose to go down this route, bear in mind that there are usually a number of application stages, and receiving the funding tends to be a highly competitive process.
Consider startup financing
Alternatively, you could choose to apply for a startup business loan from a reputable provider. These loans tend to be offered by either the UK government or the alternative finance market. It
can be harder to secure a startup loan from traditional facilities like banks, as they prefer to lend to larger, more established businesses.
Alternative finance providers are willing to offer startup loans to new businesses despite the higher risk they pose and have been responsible for helping hundreds of thousands of new businesses receive finance. So, if your startup needs funding and you’re happy to make loan repayments, this could be the option for you.
Pitch your business plan to potential investors
Crowdfunding and angel investors can also provide a good way to raise important funds for your business. Crowdfunding sites and platforms like the UK Angel Investment Network can help to promote your business plans to the right people. Using peer-to-peer lending, you can offer potential investors equity, reward or interest in return for the money they lend to you.
With these options, having a detailed and accurate business plan is imperative. Essentially, you will need to sell your business idea and convince potential investors that your business will be a success if given the chance. You should also be ready to give away something in return, be it partial ownership and control, or products.
Save money on equipment with asset finance
When getting your business idea off the ground, it’s likely that you’ll need to invest in some form of equipment or machinery. Whether the assets you need are hard or soft, asset finance could help you avoid having to spend a huge amount of capital upfront.
This option eliminates the need to spend lots of money buying business tools, equipment, or machinery outright. Instead, you can opt to rent the assets over a period of time, making affordable monthly payments in return for borrowing. Asset finance solutions are particularly useful for startups and businesses in their early stages that need equipment but don’t want to tie up limited funds in assets.
Get your business off the ground
Since the rise of the alternative finance market, there are now plenty more ways to finance your business and make your entrepreneurial dreams a reality. The thought of pursuing funding can be scary, but if you take the time to carefully plan and consider your options, then you shouldn’t be worried. As we move to a post-Covid world, 2021 could be the perfect time to get your opportunity off the ground… good luck!
Interesting Related Article: “Business finance – definition and meaning“
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