Unemployment has risen again in the UK, according to the latest figures from the Office for National Statistics (ONS). A total of 2.52m people were unemployed between January and March 2013 – an increase of 15,000 compared to the last quarter of 2012. There was slightly better news in Wales, where unemployment has fallen by 6,000 to 121,000, although the jobless rate in Wales is 8.2% compared to a national average of 7.8%.
There is no doubt the economy is still struggling. So what does this mean for your business in terms of growth? A number of steps have been put in place by the Government, including the National Insurance Contributions Bill – unveiled in this year’s Budget – which exempts employers from the first £2,000 of National Insurance payments in a bid to boost small businesses and create jobs.
And other schemes are at hand if you are trying to expand your business and take on new employees. Here are a few which might give your business a boost:
Bank loans and overdrafts
Traditionally a popular way for businesses to raise money, bank loans have become a little harder to come by as a result of the recession. The Government has introduced a number of initiatives to try to counter this, such as the Funding for Lending Scheme, launched in 2012 to help small to medium sized businesses. Initially, just six banks and building societies used the scheme, but by March 2013 this number had risen to 39.
Back in 2009 the Government also introduced the Enterprise Finance Guarantee to help provide loans, overdrafts and invoice financing to businesses. Under the EFG, the Government acts as guarantor on 75% of individual bank loans between £1,000 and £1m. Durham Business School found that the scheme has boosted the economy by £1.1bn, created 6,500 jobs and safeguarded 12,000 existing jobs.
Crowdfunding is a fairly recent phenomenon based on micro-investment and social media. Businesses, charities and individuals can post their brilliant idea on a crowdfunding website and the public – the crowd – decides whether to invest or not. Investors can give as little as £1 and are offered a range of rewards depending on the size of their donation. It seems to be a popular way for women to secure investment – 41% of successful crowdfunding campaigns are run by women, whereas just five per cent of people seeking formal investment such as venture capital or business angel backing are women.
Invoice financing allows businesses to manage their cash flow by sending all invoices to an invoice factoring specialist. An invoice factoring broker scours the market to find the funder to suit the client’s needs. The invoice funder pays 80-90% of the total to the business straight away. The funder then takes up the invoice with the business’ client, taking the worry about late payments away. According to the Asset Based Finance Association, client sales for companies using invoice finance grew from £55.6bn in 2011 to £59.2bn in 2012.