It may be that you do not need to borrow any money to start up your IFA business. However, many new businesses need to raise money to cover:
- initial start up costs such as premises costs, equipment, vehicles, computer systems, business stationery
- working capital
There will almost certainly be a period during the first few weeks or months of trading when your business is becoming known to customers and your sales are building up to their full potential.
During this period you will still have to cover expenses such as:
- wages (if you employ any staff - and your own living expenses)
- rent, rates and utilities such as heat, light and telephone (if you have separate business premises)
Because your income from the business may not be enough to cover these outgoings during the early days, you will probably need to set aside some cash, or 'working capital', to tide you over.
If you need to approach the bank for a loan to cover your start up costs and working capital, leave this entry in the cash flow empty until you have completed the rest. This will give you an idea of the shortfall between income and expenditure.
If your figures show that you're likely to need to borrow money, it's wise to check at an early stage in your planning that funds are available on terms that are acceptable to you.
Grants and other funding
You may be able to get some help in the form of a grant, for example to cover the cost of training for a small business management qualification.
You can get information on grant aid and other types of funding available throughout the UK from the business finance and support finder tool on the Gov.uk website.
Grant aid varies considerably around the UK and some assistance may be available in your area to help you start up your business.
It is also worth contacting the business support unit in your local council if it has one. Sometimes local grants are available for things like helping new businesses in economically run-down areas, or for helping unemployed people to start up their own business. You can also use the tool on the Gov.uk website to help you identify any suitable sources of local and regional funding.