Government help to get new businesses started Reply

Entrepreneur startup business model

The New Enterprise Allowance can provide money and support to help people start their own business if they get certain benefits and have a business idea that could work.

The scheme has resulted in:

  • around 460 new businesses being set up each week – around 53,000 in total
  • 12,360 businesses being started by people aged 50 or over
  • 10,040 disabled people becoming their own boss
  • 3,920 started by young people

People who don’t qualify for the scheme may be able to get other help with setting up a business.

Business Mentors have a key role to play

The New Enterprise Allowance is available to:

  • people over 18 who are claiming Jobseeker’s Allowance
  • lone parents on Income Support
  • people on Employment and Support Allowance in the work-related activity group

People on the scheme get expert help and advice from a business mentor who will help them to develop their business idea and write a business plan. If the business plan is approved, they are eligible for financial support payable through a weekly allowance over 26 weeks up to a total of £1,274.

There are also Start Up Loans

A government funded scheme to provide advice, business loans and mentoring to startup businesses

steve@bicknells.net

Would you borrow from PayPal? 1

Bank loan

The PayPal Working Capital fund will be trialled in the UK this autumn, with a more extensive rollout scheduled for 2015. Merchants (including eBay sellers) will be able to repay their advance with a share of their PayPal sales via card payments.

PayPal Working Capital is a loan of a fixed amount, with a single fixed fee. There are no due dates, minimum monthly payments, periodic interest charges, late fees, pre-payment fees, penalty fees, or any other fees. When you apply, simply select the amount you want — up to the maximum you qualify for. You choose the percentage of your sales that will be deducted from your PayPal account. (Deductions are made the day following each day of sales.) You’ll pay this percentage of your sales until your balance is repaid in full. You only make payments when you get paid.

PayPal Working Capital state that Working Capital offers major advantages compared with traditional ways of funding a business:

Funding in minutes – PayPal’s strong relationship with its business customers means we can approve an advance based on their PayPal sales history. This means the customer completes a quick online application – there’s no need to spend hours gathering information about their business. And PayPal can make a decision and provide the funds in minutes.

Pay when you get paid – Unlike traditional bank loans, PayPal Working Capital allows a business to repay the advance with a share of their PayPal sales. If they have a day without any PayPal sales that’s fine – they don’t repay anything that day.

No credit check – PayPal Working Capital is a merchant cash advance against future sales – it’s not a loan – so no credit checks are needed and the advance does not impact on the customer’s business or personal credit record. There is a single, fixed fee that is displayed to the customer before they sign up. There are no interest charges or late payment fees.

Is this something your business will be able to use? or want to use?

steve@bicknells.net

 

 

 

5 key questions you need to ask your FD Reply

Profitability

As businesses grow, their needs increase. The person steering the finances needs to be someone who can take on a broad commercial role. Forecasting, IT, tax issues, insurance and back office functions – all these need to run smoothly. But a fast-growth business needs someone who can anticipate both future opportunities and potential problems.

A good financial director will help owner-managers understand which aspects of the business are the most profitable, as well as forecasting ways to exploit other opportunities. (Santander)

So what key questions should you regularly ask your FD…..

  1. What is our cash cycle and how can we improve it – Cash Cycle Blog
  2. What Key Performance Indicators should we use and what are they telling us – KPI Blog
  3. How can we improve profitability – 15 ways to improve profitability Blog
  4. What is our Business Plan and is it the right plan – Business Plan Blog
  5. Can we reduce Overheads – 10 creative ways to reduce overheads Blog

steve@bicknells.net

Would you like to borrow against a single invoice? Reply

Close-up picture of an invoice

In August 2013, the UK Government became a Buyer of invoices on the MarketInvoice Platform, investing directly in UK SMEs looking to access working capital and grow their businesses.

Why is the Government investing funds through MarketInvoice?

The UK Government, via the Department of Business Innovation and Skills (‘BIS’) and as part of the ‘Business Finance Partnership’, has committed to using alternative finance providers to channel much needed growth funding to UK SMEs.  The scheme is investing £1.2 billion into increasing lending to small and medium sized businesses from sources other than banks.

How does it work?

Any company can use MarketInvoice provided its sells goods or services to other large businesses.

Its a ‘pay as you go’ service and you can see the estimated costs by using their calculator

Companies are vetted and the invoice must be to a large corporate not to other SME’s.

Its confidential so your customer will not know you have used MarketInvoice, if the customer doesn’t pay you will have to refund the investor.

So far £163m of invoices have been funded by MarketInvoice.

Of course it would be better if customers always paid quickly!

steve@bicknells.net

65% of SME’s rejected for a loan want to try alternatives… would you Reply

Bank loan

A government consultation ended last week into whether legislation should force banks to refer rejected loans to alternative sources of finance.

At present the largest four banks account for over 80% of UK SMEs’ main banking relationships. Many SMEs only approach the largest banks when seeking finance. Although a large number of these applications are rejected – in the case of first time SME borrowers the rejection rate is around 50% – a proportion of these are viable and are rejected simply because they don’t meet the risk profiles of the largest banks. There are often challenger banks and alternative finance providers with different business models that may be willing to lend to these SMEs.

Although the largest banks will sometimes refer these SMEs on, in many cases challenger banks and other providers of finance are unable to offer finance as they are not aware of their existence and the SMEs are not aware of the existence of these alternative sources of finance.

SME’s most trusted advisors are Accountants, according to Accountancy Age a fifth of SME’s are more open with their accountant than their bank manager and half believe that their Accountant is the most valuable source of business advice and just under half turn to their Accountant first for advise.

So why aren’t banks working more closely with accountants? I think its because its hard to work with individual accountants and build multiple relationships, its much easier to work with groups of accountants on a national basis such as www.business-accountant.com

Would you ask your accountant if you were looking for finance?

steve@bicknells.net

 

 

Will you “Pay Em”? (PAYM) 2

Mobile phone in the wallet

A new way to pay is coming this month, its called PAYM and it will be available from the 29th April.

Customers of the following banks can now register to link their mobile number with their bank account: Bank of Scotland, Barclays, Cumberland Building Society, Halifax, HSBC, Lloyds, Santander and TSB.

Other banks – including NatWest, RBS and First Direct – will join the scheme later in the year.

People who wish just to receive money – as opposed to paying it – will still be able to use the system, even if their phone is not a smartphone, or they do not use mobile banking.

  • To send money, a user will have to log into their bank’s mobile banking app, using a pass code as normal.

  • They will then have to select the recipient of the payment, using their existing contacts or by typing in that person’s mobile phone number.

  • After confirming the name of the recipient, they will have to check the amount being paid, type in a reference for it (such as “dinner”), and then press send.

  • A confirmation message will then be sent to them.

BBC News 2nd April 2014.

You can find out more details on these links:

http://www.paym.co.uk/

http://www.paymentscouncil.org.uk/mobile_payments/

So are you going to PAYM?

steve@bicknells.net

What is the 10% Crowdfunding Rule? Reply

Crowd and piggy bank

Crowdfunding is a way in which people and businesses (including start-ups) can try to raise money from the public, to support a business, project, campaign or individual.

The term ‘crowdfunding’ applies to several internet-based business models, only some of which we regulate.

The Financial Conduct Authority don’t regulate:

  • Donation-based crowdfunding: people give money to enterprises or organisations whose activities they want to support.
  • Pre-payment or rewards-based crowdfunding: people give money in return for a reward, service or product (such as concert tickets, an innovative product, or a computer game).

The FCA do regulate:

  • Loan-based crowdfunding: also known as ‘peer-to-peer lending’, this is where consumers lend money in return for interest payments and a repayment of capital over time.
  • Investment-based crowdfunding: consumers invest directly or indirectly in new or established businesses by buying investments such as shares or debentures.

Further details on their website

The Financial Conduct Authority is proposing that starting from this year inexperienced investors in equity schemes will have to certify that they will not invest more than 10% of their portfolio in unlisted businesses.

Firms that run the website platforms say the rules are too tight and will put off potential investors.

Barry James, founder of The Crowdfunding Centre, says: “Make no mistake, the infamous 10% rule – however it’s dressed up – does just that: it takes the crowd out of equity crowdfunding.”

Despite the crackdown, investors who lend to small companies will not be covered by the Financial Services Compensation Scheme which protects investors if they are mis-sold an investment or if the company they invest in goes into liquidation.

The FCA believe there is high risk that consumers could suffer losses from peer-to-peer lending.

Is the risk too high? would you invest?

steve@bicknells.net

3 ways to recover the tax from a trading loss Reply

Button "Cashback" green/silver

Many companies will make a trading loss at some point, its part of being in business. When it happens how can you claim tax relief and get a corporation tax refund? the three main ways are as follows:

1. Carry the Trading Loss Forward

The most common way is for Trading losses to be offset against profits from the same trade in future accounting periods. You don’t have to make any claim for this to happen. It’s done automatically when you complete your Corporation Tax Return.

This method means you get your refund in the future by paying less tax in future years.

2. Carry the Trading Loss Back

Instead of carrying a loss forward, you can claim for the loss to be offset against profits for the preceding 12-month period (not accounting period). But you can only do this if your company or organisation was carrying on the same trade at some point in the accounting period or periods that fall in the preceding 12-month period.

You can make a claim to carry back a trading loss when you submit your Company Tax Return for the period when you made the loss.

Your claim should normally be made in your return or in an amendment to a return.

If you’re too late to make your claim in your return or return amendment for an accounting period, you can make your claim in a letter. A claim should be made within two years of the end of the accounting period when you made the loss. Your claim should include:

  • the name of your company or organisation
  • the period when the loss is made
  • the amount of the loss
  • how the loss is to be used

When you amend a return previously submitted and paid and it results in an overpayment you should be able to claim a cash refund.

3. Terminal Loss

If your company or organisation stops trading, you may be able to claim Terminal Loss Relief. This allows you to carry back any trading losses that occur in the final accounting period to be set off against profits made in any or all of the previous three years. But for each year, you can only offset the loss against the profits in that year if your company or organisation was carrying on the same trade at some point in the accounting period or periods that fall in that year.

This gives you three years rather than one to offset the loss against.

Click here for more details from HMRC

steve@bicknells.net

 

 

Do you know a business that could claim growth vouchers? 1

Gardener

The Government have been keen to promote Growth Vouchers but I think its almost impossible to qualify, see what you think…

This government programme helps small businesses get expert advice on:

  • finance and cash flow
  • recruiting and developing staff
  • improving leadership and management skills
  • marketing, attracting and keeping customers
  • making the most of digital technology

Some businesses will be randomly chosen to get a voucher for up to £2,000 to help finance specialist business support. You’ll have to match the amount with your own funds.

Eligibility

Your business must:

  • have 49 employees or less (including any employees of companies that own a stake in your business)
  • be registered in England
  • have been trading for at least one year
  • not have paid for business advice in the last 3 years
  • be independent (ie no more than 25% is owned by other businesses or organisations)

So you even if you are eligible and you haven’t paid for any business advice you then have to be randomly chosen, that doesn’t make it easy to claim? or am I missing something? and its match funding

steve@bicknells.net