The Fixer: business loans

What is the best way to finance setting up a new company?

Have you been left out of pocket due to poor service or sharp practice? Do you have a money problem that won't go away?

It can seem impossible to get a fair result when you are battling a financial issue alone. But never fear! The AOL Money Fixer is here to help.

Dear Fixer,
I have an idea for a business venture that I think has the potential to be really successful.

However, I do not have the funds available to start the business on my own. I have only recently finished a distance learning course and am currently unemployed, so I doubt I will get a loan from a bank.

What is the best way for someone in my situation to get investment to start a new business? I would be very grateful for any advice you can give me.

P Evenson, Worcester

Dear Mr Evenson,

It may well prove difficult to get a bank loan approved for your new business, especially if you do not have an income at the moment.

Most banks offer small business loans of up to about £25,000, some of which come with six-month repayment holidays to allow you to get going before you have to start paying them back. But to qualify you will need a good credit rating and a solid business plan.

Steps to increase your chances of receiving funding from a bank therefore include checking your credit score and repairing it where possible - for example by rectifying any mistakes and ensuring you are registered on the Electoral Roll at your current address.

Taking the time to work out a business plan will also give you a better chance of success, both with the banks and in business in general.

Another financing option is to look into is crowdfunding, a relatively new way to raise money for a project by attracting investment from other individuals.

To be successful, you will need a strong pitch, a reasonable target and ideally the support of a few friends and family who are willing to pledge a small amount, say £50, towards your cause to get you started.

You can find out more about crowdfunding by visiting websites such as Crowdfunder and Seedrs.

The Fixer

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The Growing Business of Crowdfunding