Small business funding

I am unemployed and living in London. I am keen to start a business as a market stall trader but have no money to fund the project. I have a business plan, but no business record and am worried this will hinder my chances of gaining funding. Other than banks etc., are there any companies or schemes that will help me?

You didn’t mention whether you have a current relationship with a bank or credit card company or whether you have a good credit history (such as previously borrowing money and successfully paying it back). If you’re looking for a loan and you are supported by a well-developed business plan, particularly for a relatively small amount of money and assuming a positive credit history, you should get a favourable response.

In the event that a normal loan from a bank is not an option, the following alternatives might be possible:

Friends and/or family – a friend or family member, particularly one with experience of running a business, might be prepared to lend you the money. But you need to draw up a written agreement specifying when the loan will be repaid and any interest payable.

Many Enterprise Agencies are prepared to be a lender of last resort for small businesses, basically after all other avenues have been exhausted. Go to National Enterprise Network to find your local Enterprise Agency.

Many early stage business people use their Credit Card to fund expenses – items such as travel, stationery, petrol can be purchased on credit cards which, provided the debt is controlled, is a good way to fund the early stages of a business, although interest charges can be relatively high.

Another alternative which might be an option for you is to join a Credit Union. The Association of British Credit Unions (ABCUL) website provides information regarding their members and their services. Some of the larger Credit Unions offer current account facilities. If you live in an area served by one of these credit unions you might be able to avail yourself of their facilities. If you are able to save with a credit union (usually for a period of at least 3 months) you might then be able to access their lending facilities. For more information, go to the ABCUL website by clicking here or telephone 0161 832 3694.

If you are between ages 18 and 30 and unemployed, the Prince’s Trust also offers loans as a last resort to people wanting to set up a business. They provide loans of up to £4,000 for sole traders as well as grants up to £1,500. Go to

Finally there is advice on this site about raising business finance which covers all aspects of funding and has a resource centre to help you track down lenders and advisers.

The ICAEW cannot accept any responsibility for the answers to the website. By their nature the questions do not give sufficiently precise and full information to give a personal response. The response is general guidance including where the enquirer might find further and fuller information of relevance to the current enquiry.

Adam Wayland

Adam Wayland

Adam was Editor of from 2006 to 2008 and prior to that was staff writer on sister publication BusinessXL Magazine.

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Small Business Funding

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