Growth funding from HM Government

Did you know your company could be entitled to a fixed-interest loan of up to £100,000? If you’ve been trading for less than two years, or you’re seeking funding for a launch, this might be a viable option for you.

Unlike so many other funding options, you won’t have to put up any capital of your own, put up your home as security, or give a personal guarantee.

This is one of the least risky options for burgeoning entrepreneurs to establish their business, and for once, it will be you and your business idea, instead of who you know and who you are, that makes the difference.

Who is behind the scheme?

After the financial crash in 2008, it was clear something had to be done. The banks were so terrified to lend money that the government began to worry the recession would deepen. With no funds available, companies would be unable to invest in equipment, employ staff, and grow.

The government formed the British Business Bank in response, which went on to set up the Start Up Loans Company. TSULC could provide personal loans of up to £25,000 to business owners. This gave entrepreneurs the opportunity to make their companies succeed, offering a fixed interest rate of 6%, no set-up fees and no early repayment charges.

The only catch? Despite technically being a personal loan, the money must be used for business purposes.

How can you take part?

The Start Up Loans Company has official delivery partners all across the UK. They’re the experts of their local regions; knowing what kind of businesses would meet the areas economic requirements, compliment established businesses, and benefit the local community.

This helps them design marketing campaigns to encourage experienced entrepreneurs to set up businesses in the trades the area would like to see. It also means they can provide loans to the young and potential companies trying to take off in the region.

To find your nearest TSULC delivery partner, visit the website here

Getting started

When looking over your application for a start-up loan, there are five main things that your delivery partner will be looking for. They are:

Experience and knowledge of your sector

You’ll have to have a proven understanding of the field of business you want to go into. Qualifications, work experience and research will go a long way. TSULC are generally a lot more easy-going in regard to this than your average high-street bank.

Demand for the service or product you want to sell

This is where market research will help you the most. If your business is already up and running, providing invoices will prove there’s a demand. If you’re still in the planning stages, a letter of intent to buy from a potential customer will work too.

Business bank account

You must already have a business bank account open for them to put the loan money into if you are accepted. This is vital because, as we’ve previously mentioned, this is a personal loan for business purposes only.

Cashflow forecast and believable profit/loss predictions

To be accepted for the loan, you need to prove that you have done your homework. Everyone wants to run their own business, but when assessing your application, your delivery partner will need to see how you have planned for every situation with realistic cashflow and profit/loss predictions.

Make sure your cashflow forecast shows that you need the amount of money you’re asking for. If you’ll have a temporary deficit of £10,000 but you’re asking for a £25,000 loan, you’ll risk undermining the credibility of your business plan.

A great business plan

This is possibly the most crucial part of TSULC vetting procedure. This will need to be extremely detailed and exhaustive. Your business plan could make or break your chances of being accepted for your start up loan.

Your comprehensive business plan

The requirements for TSULC delivery partners isn’t hugely different than those you’d be expected to show a high street bank.

They need to be sure you are prepared to run your business, so will need to see:

  • Your company (either as it is or as it will be) and the idea behind it
  • Short descriptions of all the products and services you’ll be selling
  • Market research to show who will buy from you, why, how much they will pay, as well as any invoices and letters of intent to buy
  • How you’ll run the business day to day
  • Employees, e.g. your management team and staff you’ve already employed
  • Location of your company including any different offices and factories
  • The names of the suppliers you currently or plan to work with
  • How you’ll take payment, i.e. invoices
  • Your cashflow forecast and profit/loss predictions
  • Your sales and marketing strategies
  • Legal and insurance requirements

Depending on your company type, your delivery partner may need to see more information to consider you for the loan. Speak to your accountant for help making your business plan up to TSULC standards.

How long does the process take?

Since the application process uses public money, it can take up to three months from start to finish. With thousands of companies across the UK applying for funds, it’s important that you apply as soon as possible so avoid a long wait.

If you’re looking for a loan to support your business, and are already running low on cash, this is not the option for you.

Similarly, if you’re in the process of launching your company and have already ordered equipment and signed documents, bear in mind your loan may not arrive in time for payment.

Up to £100,000 per company

Your business could borrow as much as £100,000 in total. That is a personal loan of £25,000 each to a maximum of four company directors. This is the upper limit for a loan from TSULC, but it is advised you only ask for what you can prove you need to avoid scrutiny.

Talk to an expert before applying

Because the start-up funds are technically personal loans, you will be responsible for paying it back. If you use the money to fund a limited company and it goes into liquidation, you will be personally liable to pay back the remainder of the loan.

You will have to pass a credit check to be accepted for the loan. No matter how solid your business plan, you will struggle to be accepted for any loan if you have a bad credit history.

If you would like help to obtain funding for your business either through TSULC or through another source, please call us on 020 7330 1770 or send us an email.

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