Start-Up-Loans

How a start-up loan could help your new business

We possess expertise in assisting numerous small businesses with versatile loans and financial support. Typically, funds arrive within 24 hours.

Starting a new business without a trading history or prior credit can make securing finance from conventional sources challenging. Established banks often demand evidence of a stable financial condition and a proven track record in managing business finances, which can be difficult for start-ups. Nevertheless, there are alternative avenues to secure essential funds for launching your business, specifically through specialised start-up loans and grants. In financial terms, a start-up typically refers to a business with less than two years of trading history.

Even with a start-up loan, you must convince lenders of your business’s viability. This requires a well-prepared business plan with realistic financial projections, preferably crafted by an accountant. Additionally, be ready to offer a personal guarantee as collateral for the loan, as some lenders mandate this to ensure the loan’s security.

 

Start-ups have several avenues to secure funding for their new venture. Government-funded schemes permit up to four Directors to borrow up to £25,000 each. These loans, supported by the government, typically span one to five years, with a fixed interest rate for the duration.

For varying funding needs, approaching your bank for a short-term loan or overdraft is an option. Approval depends on factors such as the amount requested and its intended use. As a start-up, signing a personal guarantee is likely for security. This implies that if your business faces challenges and fails, you, as an individual, bear the responsibility of repaying the borrowed money. It cannot be written off during any liquidation process. Hence, careful consideration is essential before committing to such an arrangement. While no one plans for business failure, it’s prudent to safeguard yourself in case it does occur.

If facing challenges in securing funding through traditional channels, there’s no need to lose hope. Various alternative options are now available for exploration. Crowdfunding, a widely favoured choice, is typically conducted online. It involves multiple investors contributing modest amounts of money, usually resulting in them acquiring shares in the company. Given the small individual investments, the associated risk is minimal, providing an opportunity for niche projects that might otherwise struggle to secure bank funding.

 

Other options include investment and equity funds. Opting for equity funding entails relinquishing a portion of your business to the investor, who may also take a seat on your board of Directors.

If you’re a start-up or a small business seeking finance to elevate your business, Vanguard Insolvency is here to assist. We can explore both traditional and non-traditional channels in the market to identify the optimal funding solution for you and your business. Contact us today to schedule your complimentary consultation.

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David Jackson MD
Senior Partner at Vanguard Insolvency Practitioners | Website

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.