Starting your own business can be incredibly rewarding and should be encouraged, but obviously 2020 has not been a normal year and those that have only recently started/have plans to start will have obvious concerns surrounding the pandemic.
While you need to be careful in these strange times, it is also important to be aware that there are a handful of options in terms of financial relief available which could help you to survive.
Business Interruption Loan.
The most obvious lifeline during this challenging time is the Coronavirus Business Interruption Loan Scheme (CBILS). The CBILS loan scheme provides financial support to small businesses that are losing revenue as a result of the pandemic and can provide key funding in a time where cash flow is an issue for many businesses.
Coronavirus Job Retention Scheme.
Another Government financial support scheme in the UK is the Coronavirus Job Retention Scheme. This scheme is designed to protect jobs and allows businesses to furlough staff in the short term while still receiving 80% of wages covered by a Government grant.
Bank loans are a good source of funding and you may be able to find low-interest rates if you have a good credit rating, plus this option means that you will not have to give up any control of the business.
Crowdfunding has been on the rise in recent years and it is easy to see why. This allows you to raise significant capital from the general public via the internet where people can either invest a small amount in return for a stake in the business or lend you the money (peer-to-peer lending). It will require a fair amount of work convincing people to contribute, but it can also be a good source of publicity and be useful for improving brand awareness around the world.
Angel investors provide funding for your business in exchange for a share in the company which means that often they bring expertise and contacts to the company. The downside is that you do give up some control and it can be challenging to convince someone to invest.
Venture capitalists are those that provide significant financial backing in exchange for equity in the business. Typically, they only invest in those with high growth opportunity but their expertise and mentoring can be invaluable for new business owners.
These are the best options that a new business has in terms of funding and financial relief during COVID-19. The pandemic has made it challenging for all types of businesses, but with funding and intelligence, it should be possible to find some success both now and in the long-term.