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The Department of Trade and Industry (DTI)
offers assistance to Manufacturing and some
Services to Industries who are located in
the assisted areas. Most of
the North East is in an assisted area. In
all cases a grant offer letter must be received
before any commitment is made to any expenditure.
And all spending must be made before the
grant is paid, so you need to be able to
fund all the capital spend before you receive
the grant.
Regional Enterprise Grant
Investments Grants
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Available to new or expanding businesses
with 50 or less employees worldwide.
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Grant covers 15% of the cost of fixed
assets of a project.
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Maximum grant is £75,000.
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A Company can only receive one of these
grants.
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Costs need to be paid before grant paid
out.
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Grant is taxable.
Innovation Grants
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Available for innovation projects which involve the development of new or improved products and processes to companies with 50 employees or less worldwide.
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Grant covers 50% of agreed project costs.
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Costs need to be paid before grant paid out.
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Grant is taxable.
Regional Selective Assistance
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Available to new and expanding businesses based on the fixed asset costs of a project and on the number of jobs expected to be created.
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There is not a fixed % of grant. It has to be negotiated.
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The level of the grant will be negotiated as the minimum necessary to enable the project to proceed.
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Need to spend at least £500,000 on capital assets.
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Costs need to be paid before grant paid out.
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Grant is taxable.
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A company can make more than one application for RSA but each application must be for a different project.
Bank Loans
Not payable on demand if terms are adhered to.
- Scheduled re-payments.
- Medium and long term.
- Could ask for capital holiday.
Small Firm Loan Guarantee Scheme (SFLGS)
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New and established small businesses less
than £3m (or £5m if manufacturing).
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Need to show you tried to get a conventional
loan but failed due to lack of security.
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DTI guarantees 75% of the loan.
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You pay a premium of 2%pa of the loan
outstanding.
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Plus the bank's interest rate.
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New businesses can borrow between £5k
to £100K for 2 to 10 years.
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Bank charges an arrangement fee between
1-1.5%.
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May need to take out life insurance for amount of the loan.
Most funders will require a business plan which they will use to assess the viability and eligibility of your proposal.
Business plans can be done in a variety of ways but they usually cover :-
- Product/Service.
- Markets.
- Operations.
- Management.
- Financial
forecasts.
- Funding requirements.
Grants or assistance are available to help
you put together a business plan. Business
Link can provide a 50% grant (up to a maximum
of £3,000) for using accountsbynet
to prepare a business plan and help you
with your grant or loan application. Using
our many years of experience, we can help
you obtain the financial assistance available
to you in the North East.
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