Startup loans: 5 things Brighton businesses should know

Runway East

31st January 2023

Whether you’re launching a marketing company, building the next big fintech app or setting up an eCommerce site, startup life is exciting and full of possibilities. It also requires savvy spending and, more often than not, a bit of financial support.

Fortunately, whatever sector you’re in, you could be eligible for a startup loan to help you get off the ground. And if you’re based in Brighton, this article’s for you… Here are five key facts about startup loans that could help your Brighton business get the cash boost it needs.

1. You can get a startup loan from a range of lenders

When you hear the term ‘startup loan’, you most likely think of the Government’s Start Up Loan scheme. This initiative allows businesses to borrow between £500 and £25,000 and pay it back (with fixed interest) over one to five years.  

However, banks, online lenders and investors may also be able to support your Brighton business with a startup loan. The best lender for your needs will depend on your business circumstances, so it’s a good idea to explore available options before signing any contracts.

2. A startup loan is different from a business loan 

Although a startup loan will go towards your business, it’s not technically a business loan… Let’s break it down. Both startup loans and business loans involve borrowing money from a lender, and then repaying it with interest over a specified period of time.

The big difference between these loans, however, is that a startup loan is a personal loan — this means the agreement will be made with an individual rather than a company. As a result, it’ll be your responsibility to make the repayments. This also means you’ll likely need to have a good credit rating. Some lenders may like to see that you’ve had success with business in the past and that you’ve invested a healthy amount of your own money, too. 

As a startup loan is a personal loan, you won’t necessarily need a business bank account. However, if you’re hoping to see some growth soon, it’s a good idea to open a business account anyway.

3. You’ll need a strong business proposal

It’s all well and good having a fantastic idea, but if you’re not able to back it up then you may find it tricky to secure a startup loan. Before applying for any loans, it’s a wise idea to take some time to put a really well-thought-out business plan together. Why not ask peers to review it and point out any gaps or discrepancies that might put a lender off? 

If you work in a co-working space (what a coincidence, ours look nice), you might be able to find support from other local startups who have also applied for funding. 

It can be tempting to rush into submitting applications to meet the next deadline but spending a bit of extra time to develop a watertight proposal can be worth it in the long run.

4. Startup loans aren’t your only option

While startup loans can indeed be a great way to get your Brighton business off the ground, it’s not always accessible to all. But don’t worry, there are some other financing options you can try. You could look into networking to find an investor. In return for a proportion of your business, investors will fund your business growth and often offer helpful advice. 

Alternatively, you might want to look into crowdfunding. If you have an incredible pitch and feel that members of the public would want to support you, this can be a great source of finance. 

Another option is to look at business loans or grants. If you can match 50-60%, East Sussex Invest 8 (ESI 8) can offer from £10,000 to £100,000.

5. There are some great startup loans available in Brighton

If you decide that startup loans are the best option for you, there are a couple of providers in Brighton that can make the process easier and help you get the funding you’re looking for.

Let’s Do Business

Based in Hastings, the Let’s Do Business Group is an official delivery partner of the Government’s Start Up Loan programme. If you want to go down the Start Up Loan route but want a bit of support, this group can help you with the application process, increasing your chance of getting accepted.

Thomas Arneway Trust

Suitable for startups and early-stage enterprises, loans from the Thomas Arneway Trust enable you to borrow up to £20,000 over a term of up to three years. To be successful, you’ll need to have two guarantors who can repay the money if you’re unable to. 

Although the Trust is based in London, it helps businesses across the South East, including East Sussex and Brighton.

Startup loans in Brighton

However early you are in your startup journey, it’s always a good idea to explore your financing options. For many, loans can be an effective and affordable option. Why not network with other local SMEs for advice and inspiration?

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