1 Billion Venture Capital Fund in UK !

The Prime Minister just announced the creation of the UK Innovation Investment Fund to invest in technology-based businesses with high growth potential. The new fund will focus on investing in growing small businesses, start-ups and spin-outs, in digital and life sciences, clean technology and advanced manufacturing.

The Department for Business, Innovation and Skills, with the Department of Energy and Climate Change and the Department of Health, will invest £150 million alongside private sector investment on an equal basis known as pari-passu.

It is the Government's belief that this could leverage enough private investment to build a fund of up to £1 billion over the next 10 years. The UK Innovation Investment Fund forms part of the Government’s strategy for Building Britain’s Future.

Gordon Brown said:
“This fund will help build Britain’s future by investing in key sectors. It will provide crucial support for our most promising start-ups and existing small companies just when they need it most. Venture capital finance is the lifeblood of innovation and crucial to ensuring the commercialisation of the discoveries coming out of our research base. The fund will boost future UK competitiveness.”

Many government create funds or otherwise spur technology industries, and it is great to see the UK putting some real clout into its own innovation.

Marketing Stats for Business Plans

Are you having a bit of trouble tracking down the demographic information you need for your area for your business plan? This is a real issue since a lot of information you will receive is definitely biased. We recently came across a very interesting site that might help out:

URL: www.citymelt.com

PURPOSE: Citymelt provides finely detailed demographic and statistical information on more than 50,000 towns, cities, and other regional segments of the U.S. The information is free.

SOURCE CHECK: Citymelt was launched in November 2007. The data itself is derived from the Bureau of the Census, IRS, National Weather Service, fee-based data providers, and various other firms that supply statistical information.

REVIEW: This site is still in beta. We've occasionally received the quirky or questionable result in a search, so we'd be a little careful.

The time frame for data sets is very inconsistent, some from several years ago.

We were most impressed with its coverage of very small towns, as well as the unique types of data available. Citymelt not only includes the usual stats on a locality (e.g., median age, income, race) but business-oriented data too such as biggest industries and occupations. It also has unusual data such as average time of arrival to work, modes of transportation, most common home fuel source, building permits issued, banks with most branches, and other interesting data points. We also liked the fact that we could either b rowse all the data aggregated for a selected town or city or use sliders to discover a region that fits our own criteria (e.g., area demographics, education level, weather).

Getting Your Hands on ARC Loans for Small Business

Keyword: SBA Business plans for small business

SBA Interest-free loans will give businesses “breathing room”

Many small businesses are now eligible for interest-free loans under a new program created by the American Recovery and Reinvestment Act (ARRA). The “America’s Recovery Capital” (ARC) program allows small firms to take out loans of $35,000 to pay down existing business debts. Borrowers pay no interest on the ARC loans and repayment does not begin for one year. The loan program was established through the Recovery Act, which the President signed into law in February.

To qualify for the ARC loans, small companies must demonstrate they are experiencing immediate financial hardship due to the economic downturn, but are otherwise deemed by the Small Business Administration (SBA) to be viable.

The loans will be made by commercial lenders and can be used for payments of principal and interest for existing, qualifying small business debts like credit card obligations, mortgages, lines of credit, and balances due to suppliers, vendors, and utilities. In addition to the ARC loan program, the Recovery Act contained other measures aimed at helping small firms access credit. For instance, the new law increases the percentage of a loan that the SBA can guarantee, makes SBA-backed loans more affordable and provides tools to unfreeze the small business credit markets, helping small companies access capital at affordable rates.

To apply for ARC loans, businesses should visit their local SBA-approved small business lenders. The loans will be available through Sept. 30, 2010, or until appropriated funding runs out. But it is not just a matter of putting together a business plan for SBA loan and taking it in.

Not surprisingly, there is a caveat to all this largess: Banks don't like lending small amounts of money, and many of them will discourage such lending, or even deny that they are part of the program, even with a strong business plan and a good track record.

So what do you do?

First, there is power in numbers. Gather together with like minded businesses in your area, put together a jiffy business plan demonstrating the clout of all of you together. Send one or two people as spokespeople to speak with local bankers. Find one that is friendly to your interests. And, if that bank will support you now, you should support that bank when times are better. It is only fair.

Second, there is power in who you know. If your local banks refuse to cooperate, contact your US Representatives and US Senators. Get them on your side. Most Representatives and Senators are well aware of the importance of small business to the local economy, and they WILL help you out.

I wish I had confidence in banks. But I don't. We get letters all the time from veterans who can't access veteran lending programs because the money is too little for banks to deal with, and I fear the same thing will happen with ARC funds. It is absolutely criminal. It is about time that banks helped out all small businesses that are eligible for funding.

Business Plan for Auto Dealers, RV Dealers, Manufactured Homes

There is help available for used car dealerships, recreational vehicle dealerships and manufactured home dealerships. If only lenders cooperate.

Under a program to begin July 1, the U.S. Small Business Administration will offer a 75 percent government guarantee on loans dealers take to buy inventory.

Loans for $500,000 to $2 million are available under the "floor plan" financing program, a piece of the stimulus package. The program is aimed primarily at independent used-car dealers, whose financing has largely dried up. But some of the dealers worry that lenders won't take part in the program, even with the guarantee.

Dealers typically stay in business by borrowing against their inventory to buy more inventory, then repaying the debt as they sell the cars. The SBA program sets up a line of credit enabling dealers to borrow what they need; it also enables them to borrow against the line of credit again as they pay it down. Mark Brandt, owner of Brandt Auto Brokers, an independent retail and wholesale dealership in Marietta, said the Birmingham, Ala., bank that has been financing his inventory and that of other dealerships has pulled out of floor planning. Other banks, he said, have declined to fill the gap.

Banks may or many not participate in the program. The loans will actually come from SBA approved banks, not from the SBA itself. The SBA is simply the guarantor.

The best approach would be to combine as a group to encourage your local bank to offer this type of loan, emphasizing the guarantee program. Then present individual business plans for each business. Some businesses will warrant this type of financing, and some won't. The stronger your individual presentation, the more likely it is that your business can be one of the fortunate ones.

Angel lnvestors -- Bless Them, Every One

Keywords for this post: Business plans for angel investors

In Utah, the man considered to be the top angel investor is Scott Frazier.

Frazier, a Utah native living in Salt Lake City, said he was surprised to be honored, but was grateful for the recognition. He said he has been investing in start-ups for 14 years since moving back to Utah from Minnesota, where he was a health-care company executive.

"Frankly, it's fairly hard to find a business to start yourself, so it's much easier to find somebody else that's got one that's got a great idea ... to just help them move it along.

Frazier works with about 30 companies, offering both cash and contacts -- two commodities that new companies desperately need. Even with his help, about half of his companies don't make it, a common event in early stage investing.

When talking with potential angel investors, recognize the huge risk you are asking them to take. Odds are that about 50% of their businesses will fail, just like those that Frazier sponsored. If it sounds like they are asking for too much equity or too much involvement, ask yourself where you might be without them.

Our hats go off to angel investors, every single one of them.

Women's Business Plans Capture Attention. Why? Because Women Succeed.

Keyword: Business plans for women

For decades women in business have been the brunt of a gazillion jokes. Well, fellas, the joke may be on you. Financiers at all levels -- bankers, angel investors and venture capital -- are taking notice of women's business plans. And it is not because the ladies are pretty. It is because the ladies are surviving this recession a whole lot better than their male counterparts.

The Florida International University's Center for Leadership and The Commonwealth Institute South Florida discovered this in a survey released last week. And they explored why women are succeeding in such dire times.

The reasons:

First: Women-led businesses traditionally have taken on little debt and therefore have the flexibility to maneuver during tough times. Instead of going to banks for help, women leaders are overcoming challenges by using their own cash from operations to finance growth.

Second: Women are coping with the economic downturn by looking for new opportunities. Rather than focusing on cost-cutting strategies, they're strengthening relationships with customers and vendors, and forming strategic partnerships or creating new division to bring in new business.

Third: Women don't let the economy get them down.

''These women leaders were very positive about their ability to survive the current economic situation,'' says Joyce Elam, executive dean of the College of Business at FIU. "The environment has not affected their psychological state.''

Fourth: Women are self-motivated, well educated and passionate about their business. They also are optimistic. The majority of the 116 women-led organizations in the survey continue to expect an increase in revenue over the next two years.

Fifth: Women leaders are taking a collaborative approach to recession survival, turning to strategic alliances or partnerships for financing growth.

Joyce Landry, CEO of Landry & Kling of Miami, a 27-year-old cruise event services firm, credits alliances with her company's growth. She's launching a new division, an Internet portal, financed mostly through a partnership. ``We think that will help it grow much faster than looking for traditional financing options.''

Sixth: Women leaders also consider networking and mentorship important factors in their individual career success, the survey shows. Almost half actively participate in professional business associations and 90 percent believe that mentors have been important in their careers.

For these women, work and home life are extremely intertwined. The survey found most of the women leaders talk about work problems and concerns with their family.

For all of these reasons, and more, women business owners are being taken much more seriously than ever before. So, ladies, spiffy up that business plan and set your sites upward. It may be a bit of a bumpy road, but you are really on the right path!

Minority Business Loans -- From Kiva to the US

I am usually pretty thrilled with the announcement of new loan programs, especially for minority entrepreneurs. But this one caught me off guard.

Kiva is the organization that we have featured on our home page for several years now. Kiva's mission is to help entrepreneurs in third world countries, from things as simple as buying a new cow. I have personally supported Kiva, and have been glad to do so, knowing that I have helped hard working entrepreneurs in third world countries.

But beginning today Kiva will offer minority business loans to entrepreneurs in the US.

Kiva didn’t intend to raise money for aspiring businesses in the world’s largest economy. But the reluctance of U.S. banks to lend during the past nine months caused the San Francisco-based nonprofit to reconsider, said Premal Shah, Kiva’s president.

Kiva relies on “group-funding” to make its loans. People come to its Web site, sift through the business plans of entrepreneurs and then contribute in $25 increments. The money is pooled to finance loans that typically range from a few hundred dollars to several thousand dollars. The repayments don’t include interest; people either get their original $25, keep it in the lending pot or donate toward Kiva’s administrative expenses.

Since 2005, Kiva has raised more than $75 million from 500,000 people and lent the money to about 180,000 entrepreneurs in 44 countries. About 98 percent of the loans have been repaid on time, Shah said.

I know times are tough in the US. But are we truly so bad off that our projects can sit comfortably next to a poor family in Afghanistan or Uganda?

This minority business loan program will be interesting to watch.

Cut The Red Tape On Your Franchise Loan

Keywords: Business Plans for Franchising

Franchising is a great option for many business owners, especially if they are new to business, or new to that line of business. Typically bank loans for a franchise involve having the bank investigate both the borrower AND the franchisor.

There is whole lot easier way.

Go to the list of franchises that have been pre-approved by the SBA. You will discover literally hundreds of franchises in dozens and dozens of categories. Investigate a few of them and see which ones look most promising to you. The review that the SBA does only reviews for "unacceptable control provisions by the franchisor over its franchisees." It does NOT approve, nor even review, the financial operations or stability of the franchisor.

Once you have your company picked, get your own business plan in place. The lender will need to know everything about the business, including your financial obligations, and how much you are contributing, and how much training you will receive, etc., etc. Even if you are going with a well known brand name, don't assume your lender knows it. He may not.

Your upfront costs may be higher than if you did not have a franchise, but the success rate of franchise operations is higher.

SBA ARC Loans Coming On June 15

It's not a lot of money. And it is only a deferment of payment, not a grant. But the ARC loans will help some.

Beginning June 15, the SBA will start guaranteeing America’s Recovery Capital, or ARC, loans. The program offers deferred-payment loans of up to $35,000 available to viable small businesses that need short-term help to make their principal and interest payments on existing qualifying debt, according to the SBA.

The loans are interest-free and fee-free to the borrower, and 100 percent guaranteed by the SBA.

“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said Karen Mills, SBA administrator. “Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most.”

ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities.

Repayment will not begin until 12 months after the final disbursement. After that, borrowers will pay back the loan principal over a period of five years, according to the SBA