Is funding available for a new business started by a student?

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Gloucestershire_Graduate

Free Member
Apr 11, 2009
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  • #1
    I am in the process of starting up a business. I am in my second year of University, based in Gloucestershire.

    The business is somewhat unique and there are not many people currently offering the service in the UK. I don't want to give too much information away on these forums, but it is in the field of media production.

    The only thing I lack to be able to start is around £2000 for vital equipment. I am not sure if I want to take out a business loan, as I run the high risk of being a student, and having to cope with re-payments should the business fail, even though I am very confident in the idea.

    Can anyone suggest anywhere that grants may be available to people in my situation? I have had a look online, but most seem to be for underprivileged/foreign people, of which I am not eligible!

    Many thanks.
     
    C

    colin@stuff2send

  • #3
    Hmmm....well try your local business link and get them to put you in touch with your Regional Devt Agency (RDA). They're one of the Govt bodies charged with driving business in the region.
    But loans are hard to get - track record, what sector it is, payback etc.
    And in my experience, the Govt loans with set up fees and interest rates come with a whole heap of bureaucratic hassle.
    Which for £2k ain't worth it.

    Have a look at a personal loan? You must have a network of parents and friends who can loan you £2k?

    Banks - at the moment, I'd advise don't go near. Unless you like a shock of a double-digit joke interest rate and being ripped apart by some geek middle bank manager.
     
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    Burdett

    Free Member
    Feb 14, 2009
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  • #4
    I am in your situation. Second year student about to take a year out (in third year) to start my business.

    What I found was that I have two local councils that I can start in - I live on the edge so I can have premises in either if I wanted. One will give me up to £1,000 and the other will give up to £2,000 in grant money. Business Link will also pay up to 70% of costs of marketing and website design if designers registered with them do it for you.

    Check with your university. Mine have business premises they rent out to start up businesses for an 18 month period. The rates are cheap - about £70 per month for the first 6 months then it rises to £140 for the next 6 then £210 for the last 6 then they kick you out. You also have to give them a presentation about the business but my uni only does them one day per quarter so I would phone your uni now to ask when the next one is.

    Do you have a local credit union? They do low interest loans for people who have been saving with them. I am planning on getting a £300 loan and I think I will have to pay only £18 interest.
     
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    Gillie

    Gillie

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    Apr 12, 2006
    13,065
    1,463
    North West England
  • #10
    I love this idea everyone buys into that banks state yes they will give you UPTO £3k but very very few get this ... its all dependent on which year you are in and how the account is run ... and the only good thing that banks are doing for students is letting them have interest free overdrafts whilst still at Uni, when they leave they automatically revert back and are often asked to repay them within 6 months ... good luck on that one!!
     
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    davidshaw89

    Free Member
    Jan 19, 2008
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    Edinburgh
  • #13
    Gloucestershire_Graduate said:
    I agree.

    I'm already well into an overdraft, due to having to purchase a new Apple Mac for my University course. Another one probably isn't a good idea!

    Might just be time for me to accept that the idea isn't viable at this stage.
    Click to expand...

    What are you studying?

    Being in the same position as you over a year ago (finish 2nd year in a few weeks), I took up a part time job (31.5 solid hours a week actually, while still at uni) to raise some funding.

    If you want to go into business as a student, I think you ideally need to clear as many personal debts as possible so that you have overdrafts etc to fall back on should you need extra investment (which you undoubtedly will), and also so you have money to support yourself until you can afford to draw a wage.

    As Kayak said, 2k is a relatively small amount so you could put this straight onto a credit card with 12 months interest free. But you will probably need to invest more after you have purchased the essential equipment, so make sure you have access to about the same amount in 6 months time.

    Best of luck,
     
    Last edited:
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    S

    stevon

  • #15
    Gillie said:
    I love this idea everyone buys into that banks state yes they will give you UPTO £3k but very very few get this ... its all dependent on which year you are in and how the account is run ... and the only good thing that banks are doing for students is letting them have interest free overdrafts whilst still at Uni, when they leave they automatically revert back and are often asked to repay them within 6 months ... good luck on that one!!
    Click to expand...

    HBOS give EVERY student £3000, they recommend a "responsible lending policy"(!) but you can access the lot at anytime (regardless of what the cashier might tell you, get in to see a banking advisor)... The computer will tell the cashier the RECOMMENDED amount as set by the underwriter, but if the banking advisor phones the underwriter and requests anything upto £3000 then they have to grant it, its the condition of the account.

    And, with HBOS, your account is interest free for a year after you graduate to give you time to pay off the overdraft :)

    Don't know about other banks, but HBOS has a brilliant student banking account - even if their cashiers are thicker than a plank of wood.

    The reason I know all of this is: a) the mothers a bank manager and b) I had a major dispute with a HBOS cashier about the terms of my account not so long ago when she told me my overdraft limit was £1200 (I wanted £1500 for cashflow reasons) and, after numerous times of explaining the T&C's of my account, I got ahold of someone with a clue, who confirmed my sentiments and immediately upped it to £1500... Although I could've put it upto £3k if I had wished.

    As I say, not sure about the other major banks, but I'd imagine they all offer something similar, if not better.
     
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    S

    stevon

  • #18
    Everyone qualifies. The underwriters have to grant it because the £3000 limit is redeemable on the account. The condition of the account is that you have access to a 0% £3000 (max) overdraft. Doesn't matter if your... Black or white... Rich or poor. As I mentioned, they DID have a responsible lending policy - but I believe that it's been removed and the £3k limit is available from day one.

    I think for HNDs/HNCs the deal is slightly different (because it only takes 1/2 years) but for a full-time undergrad degree, the above applies.

    I believe the logic is to get students (potential high future earners) loyal to the bank... That, and they're hoping you don't bother paying off the overdraft when you get a job and they can slap some high-rate interest on ya!
     
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    BlueprintAnimation

  • #21
    When you say you have 1.5k of 'actual debt', do you mean you don't have any student loans? If you don't, I'd say that could be the best way to raise the cash - you can repay it as soon as you're able and it needn't be hanging around for years.
     
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    B

    BlueprintAnimation

  • #24
    Fair enough! I graduated last year, I'm paying off various debts at the moment and I always forget about the student loans...

    The 10% sounds alright to me if it's your only option and you can pay it off reasonably fast.
     
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    S

    stevon

  • #28
    Iwillmakeit said:
    Hi there,

    I am a student myself and I have been looking for funding myself. To be honest there is no funding available :(

    The only places are companies doing competitions etc...

    I wish you good luck with your business :D
    Click to expand...

    No funding? Are you having an absolute laugh? Fact is, they don't chuck the money away (I'm glad to say) and it actually requires some effort to a) find it and b) get it... Something a lot of students (not all) find too much bother to do... They just want to write a paragraph on their business and get it backed. At least that's what I've found.

    Competitions are a form of funding. There's a boy I met at some networking event at Aberdeen Uni - raised over a million quid via competitions. Said it was a bit of work to do the first one, the subsequent ones just needed tweaking to fit the terms of the competition.

    If you believe in an idea enough, you'll get the funding. I believe that to no end.
     
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