DELIVERING REVENUE z DISCOVER START UP LOANS A government funded scheme to provide advice, business loans and mentoring to startup businesses. SIMONE CIMMINELLI Head of Research +44 (0)7597685011 Simone@barattolo.co.uk www.barattolo.co.uk 1
The Golden Age of Entrepreneurship 2 British entrepreneurs are creating a record number of new businesses throughout Great Britain. The Company House registered 526,446 businesses in 2013, beating the 484,224 businesses recorded in 2012, and 440,600 in 2011. 2014 is going to beat the 2013 record, with more than 450,000 companies recorded from January to September and almost 2,000 registered everyday. The entrepreneurial spirit is reshaping the economy but many successful ideas risk to be lost because the entrepreneurs experience difficulties in accessing credit or don t have the support of a mentor to guide their moves. Start Up Loans mission is to harness the expertise of Britain s leading business people to encourage enterprises in the UK. Source:startupbritain.com
3 ABOUT STARTUP LOANS THE PROCESS
About Start Up Loans
Introduction 5 Start Up Loans is a government-funded scheme that supports start ups in the UK. It was created within the Department for Business, Innovation and Skills and backed by Prime Minister David Cameron. The scheme provides free business planning prior to taking any money ensuring applicants are in the best possible position to receive funding. The Start Up Loans Company does not directly provide loans to applicants: the loan is provided by one of the Delivery Partners or Finance Partners. Once an individual receives the repayable loan they will also be given access to an expert mentor, a free training course and business offers.
Key Figures 6 Start Up Loans has already helped 20,000 businesses Money lent so far: 100 Million Average loan size: 5.333 Businesses backed per day: 41 37% to female entrepreneurs 63% to male entrepreneurs Source:startupbritain.com
The Loan 7 A Start Up Loan is a personal loan for business purposes, it aims at helping individuals to start a new venture which is either still in the planning stage or has been trading for up to 12 months (in certain circumstances this may be extended to 24 months). Every loan application is considered and according to the needs of the business an average loan size of around 6,000 and an interest rate currently fixed to 6% (nominal) are allocated. The entrepreneur is required to repay the loan within 1-5 years. The final loan size and the amortization time will be determined by the delivery partner as part of the application process and the paid interest is recycled to lend to more entrepreneurs. Only one Start Up Loan can be granted per person, however more than one person in a company can be eligible for a loan. Start Up Loans do not take any form of commission or ask for money from applicants as a form of payment. It does not require any security from applicants to offer against their loans. Start Up Loans is also working on creating a Sharia interest model.
Requirements 8 Anyone living in the UK and at least 18 years old can access the Start Up Loans scheme, as long as the following requirements are met: A maximum trading time of 12 months (in certain circumstances this may be extended to 24 months). The entrepreneur must have the legal right to stay in the UK for the whole duration of the loan term. The Start Up Loan is personal and the entrepreneur is just required to have a personal bank account. The entrepreneur must have the right to apply as self-employed. Applicants for a Start Up Loan must not have been or currently be declared bankrupt and/or have any outstanding IVA s. The applicant must not have received a NEA loan. The New Enterprise Allowance (NEA) scheme and the Start Up Loans Programme are mutually exclusive packages of support offered by the government to help people set themselves up in their own business. Loans given through the NEA are Start Up Loans and it is not possible to access the Start Up Loans at the same time.
Default- 1 of 2 9 Running a new business is a risky activity and the possibility of default must be contemplated. If an individual goes into default they can seek support from the Delivery Partner that approved their loan, or from the mentor. However, it is not the mentor s responsibility to ensure that an individual keeps up with repayments on a Start Up Loan. Irrespective of the circumstances of your mentoring relationship, individuals are still responsible for paying back a Start Up Loan according to their agreed repayment plan with there Delivery Partner. A Start Up Loan is a personal loan and therefore still remains payable in the event a business ceases trading.
Default - 2 of 2 10 In general all loan providers follow standard market practice when loan repayments are missed and take a fair and reasonable approach. When a loan recipient fails to make a payment, the recipient is contacted and the reasons for the payment being missed are determined. This is followed up by an email and or letter stating that a repayment has been missed and what should be done to remedy the situation. If a loan recipient is having difficulties in meeting their loan obligations they should inform their loan provider as soon as possible. The loan provider will then try and work with the loan recipient to come to a reasonable and fair outcome to ensure they continue to meet their loan obligations. If a loan recipient fails to respond to attempts to contact them with respect to their missed loan repayments, a loan provider may then look to recover the outstanding payments through various means such as, but not limited to, issuing a CCJ or they may be referred to an approved Debt Collection Agent.
The Process
Start Up Loans The process 12 Proces s Stage Post Loan Mentor Assigned Loan Repayment Starts Courses & more support available Loan Loan approval Pre Loan Registratio n form Business idea Delivery Partner assigned Loan application submission Business Plan Execution Set up Application Repayment Next Stage Growth Time
The Business Idea 13 A business idea is a concept which can be used for commercial purposes. It typically centers on a commodity or service that can be sold for money, according to a unique model. (Wikipedia)
Registration Form 14 The first step to access to Start Up Loans is to fill in the form online. The details will be sent to the most appropriate Delivery Partner that will contact the entrepreneur within 3 working days. Applying for a Start Up Loan is very simple: in only three steps the applicant will be closer to launch the idea, answering some simple questions: 1 Insert personal information 2 Say something more about yourself 3 - Describe your idea Name Surname Email Telephone Number Date of Birth Gender Are you currently unemployed or working less than 16 hours a week? Where did you hear about Start Up Loans? Are you a current or former member of the British Armed Forces Community? Are you a parent returning to work? Have you participated in the New Enterprise Allowance Loan (NEA) scheme? Do you have a business idea? Do you have a Business Plan? What sector is your business to be operating in? Do you have a preference of which local partner provides your loan?
Delivery Partners 15 Start Up Loans has appointed 55 Delivery Partners throughout England, Wales and Northern Ireland. They are professional organisations that help to develop business ideas into a feasible business plan, to increase the chance of successfully receiving a loan, if they think that the idea is worth to be taken to the next level. The entrepreneur has the possibility to choose a Delivery Partner responding Yes to the question Do you have a preference of which local partner provides your loan? and selecting the name of the chosen Delivery Partner from the list. Once the entrepreneur is allocated to a specific Delivery Partner, it is not possible to change.
Delivery Partners - List 16 ENGLAND NORTH WEST EAST MIDLANDS WALES The Prince s Trust School for StartUps GLE Get Started / SFEDI Elevation Networks Fredericks Foundation Smarta Enterprise X-Forces Transmit Start Ups Bigga Business Virgin Startup YTKO/Outset Finance AIM (Association of Independent Music Ltd) NORTH EAST PNE Northern Pine Trees Five Lamps TEDCO (Virgin Startup) GREATER LONDON Start Up Direct East London Small Business Centre Fashion Angel Virgin Startup0 HBV Enterprise South London Business TrainE TraidE Financing Start-up Enterprise Bright Ideas Trust Business Finance Solutions / Start-Up Now MSIF Enterprise4All Lancashire Community Finance Hyndburn Enterprise Trust BBV (Virgin Startup) Wirral Chamber of Commerce Enterprise Answers EAST OF ENGLAND Foundation East NWES (Virgin Startup) YORKSHIRE AND HUMBERSIDE Business Support and Development Hull Business Development Fund Business Enterprise Fund Leeds City Credit Union National Enterprise Network (Virgin Startup) Finance For Enterprise WEST MIDLANDS Biz Britain Impetus CWRT National Enterprise Network (Virgin Startup) Start Up Direct Youth Enterprise Spring to Action Enterprise Loans East Midlands Midlands Community Finance NBV (Virgin Startup) SOUTH EAST Let s Do Business Group Bricks and Bread Enterprise First (Virgin Startup) Biz Britain SOUTH WEST South West Investment Group Business West (Virgin Startup) SCOTLAND DSL Business Finance The Prince s Trust School for StartUps X-Forces Transmit Start Ups Start Up Finance Scotland NORTHERN IRELAND Enterprise Northern Ireland The Prince s Trust GLE X-Forces Financing Annog Cyf Antur Teifi Business in Focus The Centre for Business Wrexham County Borough Council Robert Owen Community Banking
Business Planning 17 Start Up Loans offers a toolkit to help entrepreneurs with writing a business plan and with cash flow forecasting. A good business plan can help focus the entrepreneurial mind and the ideas. A cash flow forecast is an important way to help you manage your business and costs. Delivery Partners will help refine both plan and forecast to make sure it is accurate. Once the business plan is prepared and the idea has been mapped out, it will be considered for funding.
Mentoring 18 Every business that receives a loan will be assigned to a mentor, matched by the Delivery Partner. The entrepreneur can choose what to discuss with the mentor, whether it is planning which customers to target next or hire the next members of staff. The only thing that a mentor does is give advice: the entrepreneur can ask questions and discuss different possibilities for the business, but must always take responsibility for the decisions in the business. The mentor is not liable for the implications of implementing the advice. A mentor is someone who might have run her own business, worked for many years with clients who run their own small businesses, or who has good experience in an area commonly requested by start ups such as sales or marketing. Under the Start Up Loans Programme, a mentor offers two hours per month of support to the entrepreneur in the first three months after they have received a loan, and one hour per month thereafter. The entrepreneur can arrange meetings with the mentor at times that suit them both, whether over the phone or face-to-face.
Repayment Scheme 19 Assumption GBP 4533 Total Loan: 5.000 Interest Rate: 5% Loan Period: 5 years Period: Monthly 3405 Result 2277 Number of Instalments: 60 Value Instalment: 95 Repayment: 74 Interests: 21 4531 1128 TOTAL REPAYMENT 5661 1128 1128 1128 1128 1128 Year 1 Year 2 Year 3 Year 4 Year 5
Additional Services 1 of 2 20 Loan and mentoring are the bricks on which growing a business, but Start Up Loan support goes further, helping companies in the delicate phases following the receiving of a loan, providing business offers and training. Entrepreneur will also be able to access exclusive offers from our Corporate Partners including virtual office service, free accounting software and reduced fees with ebay and PayPal..
Additional Services 2 of 2 21 Software, mobile contracts, legal advice Running a business requires many services and products that can be expensive. Access to Start Up Loans allows Start Ups to benefit from special discounts offered by Start Up Loans business partners and to buy products and services at a special price. Moving from being a Start Up to a stage of growth can involve increased funding. Start Up Loans agreed some business offers with financial providers like bespoken financial institutes and crowdfunding platforms, to make it easier and cheaper to access further finance. Every month Start Up Loans offers free training events throughout the UK. Participants just need to book their place online to access useful courses about marketing, sales, human resources management or on everything they need to run a business.
D E L I V E R I N G R E V E N U E SIMONE CIMMINELLI Head of Research +44 (0) 7597685011 Simone@barattolo.co.uk www.barattolo.co.uk