Jane Lambert
"Where do I get funding for my business now that the banks have stopped lending?" This is the most frequent question that I have been asked since 2007 at my IP clinics, inventors clubs and talks and seminars for business start-ups even though as an IP lawyer I claim no expertise in business funding. Now at least I have a website to which I can refer enquiries in the Leeds City Region at any rate.
Leeds City Region LEP
The Leeds City Region Local Enterprise Partnership, which is a collaboration between local authorities and business leaders and academics within commuting distance of Leeds City Centre to promote economic and social development within that region, has gathered together a web page listing all the funding options that are available to businesses in that region The title of that web page is Business funding options and you will find it at http://business.leedscityregion.gov.uk/support/funding/
Types of Funding
Funding for businesses falls into two categories:
- long term investment in plant, buildings and other fixed assets; and
- short term funding to purchase stock or meet other immediate priorities.
As a general rule long term investment takes the form of investment in exchange for a share in the business while short term funding takes the form of loans. If you don't know the difference between investment and lending then your first port of call should be "Business Finance Explained" on the gov.uk website. Once you are clear in your mind as to what you need for your business and what is on offer then take another look at the Business Funding Options web page.
Types of Funding Available
The website offers information on:
- Grants: essentially gifts of money that do not have to be repaid;
- Investments: funding in exchange for shares in a limited company or possibly a partnership; and
- Loans: funding that has to be repaid usually with interest.
Grants
One source of grant funding is The Business Growth Programme which provides grant funding to businesses based in Leeds City Region or planning to invest here. You will find further details on the LEP Business Growth Programme page of the LEP's website. There are details of other grants on the LEP website. There is also a very good website called j4bGrants which publishes a regular newsletter to which you can subscribe.
Investment
This could come from a business angel (a wealthy individual who wishes to invest in a new venture) or an institution that believes that your business will grow very quickly and sees an opportunity to make a substantial profit in two or three years time through a flotation on the stock market or a business sale. The LEP website links to Envestors which manages the Yorkshire Association of Business Angels (a group of business angels based in Yorkshire) and to Finance Yorkshire which provides a range of funding products.
Lending
Traditionally short term lending has been provided by the clearing banks and the LEP has arrangements with a number of banks that have received funding from the Regional Growth Fund to support local business. The Business Funding Options web page mentions those arrangements and links to a number of lending schemes. It also links to the Business Enterprise Fund which is a community development finance institution which can sometimes offer loans to businesses that would not qualify for bank lending.
Eligibility
The website is directed to businesses that are in, or are contemplating moving to, the Leeds City Region only. Check the coloured map above to see whether you are in or out of that region. This article may still be useful to you even if you are outside this region because other regions make similar provision for businesses in that area.
Legal Advice
Whatever form of funding you seek even if it is a grant you will enter legal relations with, and may well incur legal obligations towards, your funder. Before assuming those obligations you should seek proper advice from an experienced business lawyer. Remember that there are likely to be many issues such as tax, intellectual property and enforcement.
Further Information
if you want to discuss this article, call me on 020 7404 5252 during business hours or send me a message through my contacfot rm.
Post Script
Kin F. Kam wrote on Linkedin: "If you have an innovative product underdevelopment, or in the hope of developing it, there is also #InnovateUK 's innovation voucher scheme. It's worth £5K. I got mine confirmed last week."
Post Script
Kin F. Kam wrote on Linkedin: "If you have an innovative product underdevelopment, or in the hope of developing it, there is also #InnovateUK 's innovation voucher scheme. It's worth £5K. I got mine confirmed last week."
Many thanks for that comment and good luck with the business
