HERTFORDSHIRE businesses which have been refused bank finance can apply for loans of up to £50,000 from a community organisation.
Foundation East has loaned more than £780,000 to small businesses this year, including a 60-year-old musician who has set up a music shop.
The message from Foundation East is: ‘Don’t be put off by stories saying that there is no money around.’
To gain a loan a company needs a sound business plan which sets out the market opportunity and how the company is going to service it.
Bob Shimmon, Foundation East business loans manager for Hertfordshire, said: “Setting yourself up in business is hard work and needs the support of family and friends, but you also need to be objective about the market opportunity and assess if there actually is one, how big it is and how it is served at the moment. This is a key purpose of the business plan – it is not just to help raise finance.
“It is no good putting your plan in a drawer and forgetting about it, you need to regularly review how you are doing against the plan, assess what is working and what needs to be changed.”
Foundation East is a membership organisation, with individuals and companies purchasing shares in and having the opportunity to say how the money is lent.
All start-up companies are given coaching and this has greatly increased their success rates.
This is evidenced by the increasing proportion of loan capital that is recycled – being repaid and then made available for further investment.
The money is borrowed on flexible terms allowing early repayment without penalty and can be used for a wide range of purposes including purchase of vehicles and equipment, covering shortfall before payment of orders, training and for new business start-ups.
Bob added: “Talking to a business coach can be very helpful in the early days and with the demise of Business Link we are keen to signpost people to where they can access the support they need. This advice often makes all the difference to the success of a company.”
> For information about business loans or becoming a member of Foundation East visit www.foundationeast.org.