The Fixer: business loans

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

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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

Whatever your financial problem, write to themoneyfixer@aim.com and The AOL Money Fixer will get on the case.

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