Decisions, decisions. Let us at Neil Smith Accountancy guide you through this important decision, and figure out what’s the most optimal choice for you.
What is a start up loan and how do I get started?
There is a big difference between a start up loan and a new enterprise loan – a start up loan is available for:
- UK residents
- Persons aged 18 or over
- Residents that have (or plan to start) a UK-based business that’s been fully trading for less than 24 months
With a fixed interest rate of 6% per year, start up loans are government-backed and range from £500 to £25,000. Unlike a business loan – this is an unsecured personal loan. Not only this but you’ll also receive support and guidance throughout, including writing your business plan and a total of 12 months free mentoring.
There a few essential factors to bear in mind when setting up a business for a startup loan:
- Register your business – a start up loan can not be rewarded without this. Most business register as a sole trader
- Should you form a limited company, business finances will be separate from your personal finances. Keep in mind that there will be reporting and management responsibilities and Neil Smith Accountancy are the perfect partners to lead you through this sometimes complicated process
- Partnerships – the most viable way to for two or more people to set up a business together. A great way to split the cost of your debts. Don’t forget that you also have accountancy responsibilities, with Neil Smith Accountancy on your side, it’ll make your journey to getting set up with a start up loan. Learn more here being in a partnership and how to register.
Consult https://www.gov.uk/set-up-business for further information on setting up a business and getting your startup off to a flying start. Or, get in touch with Neil Smith Accountancy, who have years of experience helping fledgling businesses find their feet.
New Enterprise Allowance – the lowdown
Also known as an NEA, the new enterprise loan is available for job seekers and the individuals with a strong business idea that has perceived potential. Learn more about how Razan became an entrepreneur success story here: https://youtu.be/CH7EPwFqugo
The best way to get started with your NEA is to have a chat with your Jobcentre work coach. They’ll also describe the insides-and-outs of your first few months of mentoring in your new trade.
What eligibility application criteria is there for a New Enterprise Allowance?
- If you’re receiving Jobseeker’s allowance, Universal Credit or Employment or Support Allowance
- If you receive Income Support, you’re a loan parent, sick or disabled
What can I expect to receive with the New Enterprise Allowance?
With your New Enterprise allowance, you’ll get your own personal mentor, in part to speak through your business idea and also the practical viabilities of your business plan. Once you get the green light – you’ll be ready to trade.
Two other incentives will also help you get you on your feet business-wise:
- You could be eligible for a weekly allowance valued at £1,274, set over 26 weeks
- You can get assistance with business start-up costs
So, here we are. The main differences between an NEA and a Start Up Loan is that you’ll be receiving government benefits to apply for the Start up Loan and the New Enterprise Allowance is open to all businesses or business plans that’ve been trading for less than 24 months.
As a new business, it’s important to ensure you have an effective profit and loss account; it forms the basis of your bookkeeping and is vital for keeping your finances in check. Find out more with our blogpost which will teach you how to build and use this important tool.
For further help, including self-assessment tax returns, company accounting and expert business advice, get in touch with Neil Smith Accountancy, who provide first class small business accounting services throughout Essex and London.
Drop by for a chat with our friendly team:
27 Powers Hall End,
Witham, Essex,
CM8 2HE
Call us on: 01376 512 637 or alternatively 07973 829 161
Say hi here: enquiries@neilsmithaccountancy.co.uk