Microfinance is our way of helping entrepreneurs find the capital they need to fund business projects. Many banks throughout the UK have lending requirements that may be too restrictive for the average small business. Without good credit and a personal guarantee, it may be too difficult for the average entrepreneur to start their own business. After all, every one needs a bit of start up cash to buy a few necessary business tools or pay other expenses to make it happen.
Small business loans are notoriously difficult to obtain from big banks. Your business plan will be scrutinised and prior credit blemishes can stop you in your tracks. There are alternatives to big banks that can allow your small business to obtain the loan or financing you need. Many entrepreneurs, even those that are more established, turn to this alternative form of funding in order to start their business.
Peer lending can allow you to skip banks altogether. By borrowing money from your peers or smaller investors, you have the opportunity to inspire others to invest in you. The amounts issued will vary widely, and can be small dollar amounts to something more substantial. The services allow you to obtain many individual small loans through a common peer-to-peer aggregator service.
By providing a preview of your business idea, you can attract individual investors that may be willing to take a chance on you with a few dollars. Some of the fastest growing new businesses are initially funded with this approach, giving them the initial startup capital they need to buy crucial supplies and market their new product or service.
Microlending can allow you to obtain much needed equipment or inventory to start your business. Perhaps you need a machine or supplies for a store to get your business off the ground. These small loans can be a great alternative to the traditional commercial capital loan.
While the industry is evolving, Microfinance loans can be used for a variety of things. They can help you hire freelance contractors or pay salaries on time. You can obtain business services such as accounting software, payroll, develop a website, obtain insurance or even get legal help incorporating your business. In general, this form of financing does not have many restrictions and business owners can use the money raised for whatever their needs are.
Grants can also help business owners
Not only can a small business use a loan to fund their business, but some charities or even councils are starting to get involved in the microfinance industry as they may provide a grant in order to help an owner get the financing they need. The amount of money paid out will normally be small, and the number of companies that may be eligible is limited, but the big advantage to a small business owner in using a grant for their financing needs is that they will not need to repay the funds. Councils such as Craigavon Borough offer grants for rent and other support to local businesses.
Government and not-for-profit Microfinance loans
Small businesses also have access to programmes created by government agencies, such as Invest Northern Ireland, or local not-for-profit organisations. They will typically provide some form of low interest loans to help a micro enterprise or entrepreneur access the funds they in order to grow. Learn how the NI Small Business Loan Fund can provide the financing that you need.
Personal Financial Network is an adamant supporter of microenterprise and small businesses. While many people seek financial assistance to buy things and pay bills, you are here because you want to take control of your life and create your own wealth.