Get your

01 January 2000
Get your

TRYING to make sense of the numerous, ever-changing Government-funded schemes aimed at helping businesses start, expand and improve, is a headache. A cynic might justifiably wonder whether the Government is trying to make it difficult for businesses to gain access to funds.

As Steve Bleasby, commercial director at Bridge Business and Training Consultants in Ockley, West Yorkshire, says: "There is no doubt that businesses are confused - schemes change on a regular basis and the faces change too."

Not only do schemes change, but they often have different names in different regions of the country. And depending on the perceived needs of a region, there are differing levels of funding available. They can also be confusingly generic and full of jargon.

But if employers can invest the time to get to grips with what is on offer, who is offering it, and what their company needs, they might get hold of subsidised loans, training, and consultancy.

Even working out when to apply for Government schemes needs judgement. Training and Enterprise Councils (TECs), for example, can run out of funds towards the end of their financial year, warned Dawn Blee, group training manager at Copthorne Hotels, at a recent Hotel and Catering Training Company conference.

The first hurdle is to understand who administers the schemes. Most employers with a concern for training will by now have at least a vague understanding of the role of TECs, which are successfully running all over the UK, staffed by business experts. Put simply, TECs can offer funding for training schemes that might increase job creation in companies or further the training of existing employees.

tec training budget

Their services are funded by the Department of Employment and the Department of Trade and Industry (DTI).

For example, employers who want to offer staff National Vocational Qualification training can get help from TECs. Any company wanting help should note that the budgets of TECs are currently being cut by Government, an area of great concern to TEC management. The training budget fell from £762m for 1993/4 to £705m for 1994/5.

Employers may have less understanding of Business Links - another, newer source of help. So far there are about 50 Business Links, including ones in Cornwall, Birmingham, Hertfordshire, and Runcorn, but 200 are planned to be opened by the end of next year - more than double the number of TECs.

Business Links are actual buildings where bosses can come to discuss what financial help they can receive to aid the success of their business. They also provide a place where business owners can attend courses or hold meetings with other employers. Sometimes they are on the same premises as a TEC.

Business Links are funded by theDTI and often run in conjunction with TECs, chambers of commerce and local authorities.

Business Links are also a source of funding for consultancy services. Consultants hired through a Link can help businesses set up, develop, solve problems, or expand. Part-funding is available for a range of consultancy, from business planning to sales and marketing advice.

Part of the role of Business Links is to replace the former Enterprise Initiative programme (EI), which also offered part-funding of consultancy fees. It ran from 1988 until this summer, and hundreds of thousands of companies benefited from the scheme, says the DTI, at a cost of £300m.

Up to a third of the cost of hiring a consultant for up to 15 days was paid for by the DTI under EI. In assisted areas, where the Government particularly wanted to help businesses, up to half the cost could be reimbursed. The aim of Business Links is to offer the same consultancy services, using the same, carefully vetted consultants.

The cost of consultancy must be matched by a percentage from the company. For example, some Business Links provide up to 50% of funding for consultancy work, at a cost to the Government of up to £20,000. Others will provide a lower percentage of funding.

Replacement funding for that lost by the ending of EI is often in addition to funds offered by Links for further business development.

At Hertfordshire Business Link in St Albans, there are funds available for the quality accreditation scheme Investors In People (IIP). For companies with fewer than 50 staff the Link will fund £500 of consultancy to prepare the company for starting down the IIP route. A further maximum of £1,000 will be supplied for follow-up consultancy, although this sum must be matched by the company.

"We are not a grant machine - we are there to oil the wheels," says Stan Strangwick, business adviser at Hertfordshire Business Link. "If something is free then the companies sometimes do not put in the commitment needed to get the investment to work."

starting up a business

Business Links can also provide funding to help businesses start up. For example, Leicester Business Link, based in an area with a high ethnic population, is running a scheme to help ethnic minorities start up.

Business Links may also help you to get a reasonably priced loan. Under this scheme the Government underwrites a bank loan that would not otherwise have been granted because of lack of security. The repayments are at reasonable rates and are required over a sensible period.

In Birmingham, where the scheme is offered, only the interest on the capital borrowed must be paid back during the first two years. The loan must be paid back within seven years, at a fixed interest rate of 10.2%. A variable rate is also available. The maximum loan is £250,000.

This is an old scheme rejuvenated. It used to be called the Small Firms Loan Guarantee Scheme, but it went out of favour with the banks about three years ago because of a high business failure rate. Companies that were bad ventures to begin with were being funded. It only guaranteed up to £100,000 and was more expensive - interest rates were 17%.

So far the new scheme, begun only this year, is only available at 10 Business Links, including Birmingham and Hertfordshire, on a pilot basis.

In Birmingham, about four companies a month are signing up and £720,000 has been guaranteed. In order to prevent the level of failure seen under the old scheme, Birmingham Business Link offers companies heavily subsidised accountancy consultancy to guide them through getting a loan.n

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