Thursday, 18 September 2008

Funds for New Businesses

Anyone who advertises or tells you that you can start a business with no money are lying! Any business that is started whether money from blogging to cleaning windows, you need some money to start off with and to carry you through.

It is so true, that many businesses fail because there wasn't any provision for funding until the business takes off. So money must be the biggest concern to anyone who wants to get a money making scheme of the ground.

There are many schemes you can apply for when you are on the verge of starting a business. Business money is out there to be claimed, yet every year there are piles of cash waiting to be invested in new businesses just sitting around doing nothing because many don't know about it.

You can apply for a direct business grant. This is purely and simply a cash award given out for most business ventures or developments. A direct grant is awarded on condition that enterprise involved usually putting up around half of the cost of the grant awarded. Useful.

Another option is a repayable grant, which is another cash payment grant but more of a loan where repayments are paid out of future profits. Although you hope your business doesn't fail, if it did the grant/loan is written off.

An Equity finance scheme is set up so it can help by giving cash injected into the business and the financer holds an equity share of your business. The idea is to pay but the investment when the business equity increases after time.

Finally, there is a scheme called a 'soft loan' where the conditions of repayment are more generous than they would be under normal finance circumstances. The interest rate may be less or no interest at all or the repayment term could also be for a longer period.

All these grant and loan schemes are about waiting to be claimed and are certainly cheaper than getting a bank loan or using credit cards.

Starting a successful business is all about planning ahead. The first stop should be a business and part of that is to plan find out how much you need and how you are going to fund you new business. You will need on if you apply for a grant or loan anyway! If you don't you will fail.

If you call you local Chamber of Commerce, most towns have one. They will give you more details on how to apply for the grants above. There may even be a recent new scheme to help new businesses as they often do, that's what they are there for! - A company offering businesses funds - Funds from the EU - CDFA helps businesses who can't get funds from normal sources.

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