Best small business loan for new business UK 2023Best small business loan for new business UK 2023

Start-ups and small businesses in the UK can benefit greatly from grants and loans. Many entrepreneurs often delay applying or don’t realize they’re eligible. Here are some of the best finance opportunities in the UK.

Coronavirus Grants and Loans

The Covid-19 pandemic has left many small businesses in need of financial assistance. In response, the government has introduced several grants and loans:

  • Coronavirus Business Interruption Loan Scheme (CBILS): Guarantees up to £5 million for small businesses, with the government paying interest and fees for the first year. The scheme runs until the end of January 2021.
  • Coronavirus Job Retention Scheme (CJRS): Covers 80% of employees’ salaries up to £2,500 per worker per month for businesses affected by the pandemic. The scheme is open until the end of March 2021.
  • Kickstart Scheme: Provides funding for employers to create job placements for 16-24-year-olds on Universal Credit.
  • Future Fund: Innovative companies can borrow between £125,000 and £5 million. Applications close at the end of January 2021.
  • Bounce Back Loan Scheme (BBLS): Guarantees 100% of SME loans worth up to 25% of their revenue. Applications close at the end of January 2021.
  • Local Restrictions Support Grant (Open or Closed): Funding for businesses impacted by the pandemic or forced to close during the second Covid-19 lockdown.
  • Additional Restrictions Grant (ARG): For businesses that aren’t eligible for other small business grants or loans.

Small Business Grants

Grants provide funding that doesn’t need to be paid back. Some of the grants available to small businesses in the UK include:

  • Seed Enterprise Investment Scheme: Encourages investors to fund new ventures by offering tax relief. Companies can receive a maximum of £150,000.
  • Grow It: Offers up to £15,000 and expert guidance for organizations working on local community projects.
  • Gigabit Broadband Voucher Scheme: Provides up to £3,500 for rural businesses to upgrade to high-speed broadband.
  • Arts Council National Lottery Project Grants: Supports creative organizations with grants ranging from £1,000 to £100,000.
  • CRACK-IT Challenges: Offers up to £1 million for businesses to solve scientific or technological challenges.
  • Tradeshow Access Programme: Provides between £500 and £2,500 for businesses to promote and attend international trade shows.

Small Business Loans

These loans help small businesses grow:

  • Enterprise Finance Guarantee (EFG): Guarantees loans of between £25,000 and £1.2 million for small businesses based in the UK with an annual turnover of less than £41 million.
  • NatWest Small Business Loan: Offers flexible loans of between £1,000 and £50,000 with contract terms of up to 10 years.
  • HSBC Small Business Loan: Offers loans between £1,000 and £25,000 with a fixed interest rate and a three-month repayment holiday.
  • Royal Bank of Scotland Small Business Loan: Offers loans between £1,000 and £50,000 with flexible repayment periods.
  • Lloyds Business Loans: Offers loans between £1,000 and £25,000 with either fixed or variable interest rates.
  • Funding Circle Business Loan: Offers unsecured loans between £50,000 and £500,000.
  • Greater London Investment Fund Loan (GLIF): Offers between £100,000 and £1 million in funding for businesses based in London.
  • Fredericks Foundation Loans: Offers loans between £2,500 and £35,000 for business owners who have been unable to secure other forms of finance.

Start-up Grants

These grants help new businesses get off the ground:

  • New Enterprise Allowance: Connects expert advisers to people launching start-ups. Eligible applicants may receive a weekly allowance for 26 weeks.
  • Do It Awards: Provides up to £5,000 for entrepreneurs working on social issues.
  • Eureka Eurostars Scheme: Covers up to 60% of R&D project costs, up to €360,000.
  • Plug-In Van Grant: Covers up to 20% of the cost of a low-emission van or truck, up to £8,000.

Start-up Loans

These loans provide financial support to entrepreneurs developing a business:

  • Start-Up Loan: Offers up to £25,000 per individual, up to £100,000 per business. The loan has a fixed interest rate of 6% and includes a year of free business mentoring.
  • Prince’s Trust Enterprise Award: Offers loans between £500 and £5,000 to business owners aged between 18 and 30. The loans incur interest at 6.2% annually.
  • Virgin Start-Up Loan: Offers loans between £500 and £25,000 with a fixed interest rate of 6%. There are no set-up fees or early repayment penalties.

How Can an Accountant Aid in Securing a Grant or Loan?

Engaging with a financial expert can significantly increase your likelihood of finding the ideal funding solution for your enterprise and elevate your chances of obtaining approval.

When you’re contemplating the idea of applying for a business loan, an accountant could be instrumental. They can assess your capacity to repay the loan and provide guidance on the most beneficial financing option tailored to your needs.

In addition, an impartial financial adviser can assist you in determining the amount of capital you need to amass and how you plan to utilize it once it’s deposited in your account.

During the consultation phases, it’s advisable to convene to deliberate on your funding alternatives. To prepare for your application, you should organize any pertinent documents, which include your business plan.

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