Many people, all over the world in fact, face the problem of trying to start a business. It is a classic dilemma: you have an idea to make money, but you need money in order to start the business. It’s a classic “Catch-22″ scenario. So, that is where a government business grant can come into play. As it happens, the United Kingdom is one of the very best places on Earth to either start or expand a small company.
The good news about business grants from the government is that there are lots of them out there. The bad news: you have to seek them out and apply; they do not come looking for you. There are close to two dozen different business grants in the UK. So, let’s look at just a few of them. First, there’s the direct grant, where a program will give you some funds to pay part of the costs for training, product development etc. Now, that’s a key point: part of the costs. It’s rare for a grant to completely cover the costs of some aspect of your business, but it will at least cover a portion.
Then there are grants that are much like a small business loan. The difference is, if your business fails, you do not have to repay the money. And then there are real business loans; they are called soft loans because the terms and conditions are very generous. The interest rate is usually quite low, some are even interest free. Next, you can get what is known as equity financing. With this type of grant, you don’t pay the grantor back in cash, but in shares in your company. In this case, the grantor looks at your business as an investment; they believe you have the potential to grow your company into something profitable, and that will mean that the shares they own will increase in value.
Sometimes, business grants in the UK aren’t about money at all; they have to do with skills. After all, many new businesses often lack knowledge or skills in a particular area: marketing, promotions etc. So, some grant programs have come to recognize this, and they offer free (or greatly reduced) advice on those critical subjects. Then there’s the issue of resources. For some small business owners, it’s not that they don’t know what they’re doing; it’s that they don’t have the physical materials or maybe a factory / store to develop their product or service. So, some grants are made of up raw materials, office equipment etc. Going hand in hand with this type of grant is the transfer of technology. Very often, new and innovative inventions or processes are created by large corporations or government labs. In the U. S. , NASA was responsible for incredible breakthroughs in fuel cells, computers etc. So, sometimes large corporations or governments will share these new developments with some small companies as a means of both helping they to get started, and to disseminate the technology.
Then there is the issue of not new technology, but merely the best way of doing something. As an example, a dozen people will have a different way of laying bricks. Yet, one of them might do it the best and most efficient way. Over time, that way will become the industry standard. This is also known as “Best Practices”, and some companies will share these with start-up firms to help them operate in the most efficient means possible.
Posts Tagged ‘Equity Financing’
Business Grants in the UK
December 18th, 2009Business Grants in the UK Available to Overseas Businesses
December 18th, 2009Many people – in companies all over the world in fact – face the problem of trying to start a business. It is a classic dilemma: you have an idea to make money, but you need money in order to start the business. It’s a classic “Catch-22″ scenario. So, that is where a government business grant can come into play. As it happens, the United Kingdom is one of the very best places on Earth to either start or expand a small company. They offer business grants to native UK residents but also people relocating their businesses in the UK for overseas, so you can get in on the act too!
The good news about business grants from the government is that there are lots of them out there. The bad news: you have to seek them out and apply; they do not come looking for you. There are close to two dozen different business grants in the UK. So, let’s look at just a few of them. First, there’s the direct grant, where a program will give you some funds to pay part of the costs for training, product development etc. Now, that’s a key point: part of the costs. It’s rare for a grant to completely cover the costs of some aspect of your business, but it will at least cover a portion.
Then there are grants that are much like a small business loan. The difference is, if your business fails, you do not have to repay the money. And then there are real business loans; they are called soft loans because the terms and conditions are very generous. The interest rate is usually quite low, some are even interest free. Next, you can get what is known as equity financing. With this type of grant, you don’t pay the grantor back in cash, but in shares in your company. In this case, the grantor looks at your business as an investment; they believe you have the potential to grow your company into something profitable, and that will mean that the shares they own will increase in value.
Sometimes, business grants in the UK aren’t about money at all; they have to do with skills. After all, many new businesses often lack knowledge or skills in a particular area: marketing, promotions etc. So, some grant programs have come to recognize this, and they offer free (or greatly reduced) advice on those critical subjects. Then there’s the issue of resources. For some small business owners, it’s not that they don’t know what they’re doing; it’s that they don’t have the physical materials or maybe a factory / store to develop their product or service. So, some grants are made of up raw materials, office equipment etc. Going hand in hand with this type of grant is the transfer of technology. Very often, new and innovative inventions or processes are created by large corporations or government labs. In the U. S. , NASA was responsible for incredible breakthroughs in fuel cells, computers etc. So, sometimes large corporations or governments will share these new developments with some small companies as a means of both helping they to get started, and to disseminate the technology.
Then there is the issue of not new technology, but merely the best way of doing something. As an example, a dozen people will have a different way of laying bricks. Yet, one of them might do it the best and most efficient way. Over time, that way will become the industry standard. This is also known as “Best Practices”, and some companies will share these with start-up firms to help them operate in the most efficient means possible.
Financing a small business does not have to be complicated
December 17th, 2009Financing a small business does not have to be complicated, as there are a number of resources that can help you along the way, as well as numerous financial and government institutions that cater to those wishing to finance a small business. In terms of financing there are several things that need to be examined; do you need working capital or can you use existing cash flow for the small business? How urgent is your need for financing and what are your risks? What will the capital be used for and what industry does the small business operate under? There are an exhaustive amount of questions that need to be answered when it comes to financing a small business. Realize that there are two different types of financing; equity financing and debt financing. Equity financing is looked at as the amount of equity to debt ratio that you have in the business. The biggest resource of equity financing comes from venture capitalists. A venture capitalist is generally a financial wizard with a lot of money to invest. They prefer to invest in businesses that are 3 to 5 years old that look promising and are able to offer a big return on the initial investment. . . Debt financing can be obtained through banks, credit unions, lending companies and other financial institutions that offer services to small business owners. The government, both on the federal and local level, also has numerous programs in place to assist people in securing financing for small business. One of the most common places to look for financing opportunities is with the United States Small Business Administration. This entity has a number of programs in place, including special financing programs for women, veterans and Native Americans who wish to secure funds for a small business. . The U. S. Small Business Administration has a comprehensive website that explains in detail all of their available financing programs. Another source of funds for small businesses comes in the form of grants. A grant is an award of money that does not have to be repaid. Many times, grants come with stipulations on how the funds can be used, but there do exist many grants that are available for the sole purpose of starting up a small business. Grants are available from a number of sources including the federal government, private organizations and individuals, and local initiatives that may be offered in your local area. Some of the different entities that award grants include the Small Business Administration, the Department of Veterans Affairs, and the National Science Foundation, just to name a few. If you are just starting up your business and have already invested a significant amount of your personal funds, you are more apt to qualify for a small business loan through a commercial lender. Before using debt financing to fund a small business, it is wise to first exhaust all other avenues. Business associates, friends and family members may be willing to invest a bit of money if you are able to provide them with a sound business plan and the potential for a healthy return on their investment. Did you find this article useful??? For more useful tips and hints, points to ponder and keep in mind, techniques, and insights pertaining to Internet Business, do please browse for more information at our websites. <a onClick=”javascript:pageTracker. _trackPageview(’/outgoing/article_exit_link’);” href=”http://www. adsence-dollar-factory. com”>http://www. adsence-dollar-factory. com</a> <a onClick=”javascript:pageTracker. _trackPageview(’/outgoing/article_exit_link’);” href=”http://www. 100earningtips. com”>http://www. 100earningtips. com</a>
