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Outside Greater London the Midlands is named UK’s most entrepreneurial region

Recent figures suggest that the Midlands has become the UK’s most entrepreneurial region outside of Greater London.

Data from the Start-Up Loans Company (SULCo) a Government-backed scheme launched six years ago as a route to finance for many new businesses shows that over that time it has lent over £57 million to small businesses in the Midlands, split as £22million to the East Midlands and £35million to the West Midlands.

Some 8,079 business in the Midlands – and well over 55,000 across the UK – have received low-interest loans, with the average loan size in the Midlands totalling £14,032.

The Midlands was beaten only by London as the most entrepreneurial city in the UK. According to the figures, SULCo lent more than £100 million to a total of 14,000 businesses in Greater London.

Lauren Taylor was inspired to set up her own business – Kokoso Baby – after she struggled to find an effective, natural cream to treat her newborn baby’s dry skin. After a long search, she discovered raw virgin organic coconut oil and quickly became passionate about its many skincare benefits and uses.

With the help of a £10,000 low-interest loan from SULCo, she and her husband set about creating a range of premium organic coconut oil toiletries for children made from natural ingredients sourced from an ethically family-run farm in Thailand.

Since then the business has gone from strength to strength. In 2015, Lauren secured a deal to stock her coconut oil in 200 Boots stores nationwide, increasing to more than 800 stores in 2018. She has launched new products including natural baby washes and gift sets, featured in Vogue Magazine, scooped various awards and has listings with JoJo Maman Bébé, Ocado and Amazon. Turnover grows year on year and the business has recently moved into new premises.

Lauren Taylor, 38, the founder of Kokoso Baby, said: “Having a baby with dry skin is a problem for a lot of mums, and I was driven to find a solution that would be able to treat it organically. I became passionate about the wonders of coconut oil, and it struck me that all parents needed to ditch the chemicals found in traditional baby skincare lotions.

“As soon as we started dealing with Boots, it meant growing quickly, which created a range of challenges. The more product we sold, the bigger our cash flow issues became. Thankfully, the loan helped us to fulfil our orders.

“We also received great support throughout the whole application process, from advice on writing a business plan to creating financial forecasts.”

Midlands-based, Aimee Johnston, had always harboured hopes of starting her own business when she began sewing clothes for her first child.

Based in Nottingham, Mommamakes produces unisex clothes for babies and toddlers in a ‘trendy’ style that are not generally found in traditional retailers.

In early 2015, when people started commenting on the quality of her handmade baby clothes, Aimee decided to start selling them through social media. However, Aimee soon felt that Mommamakes needed a more professional feel. She applied for a £2,000 low-interest loan to launch a website, online store and purchase higher quality sewing equipment.

Aimee Johnston, 31, founder of Mommamakes, said: “Since receiving the loan, Mommamakes has really started to take off. There has been so much demand that both myself and my partner now work full-time on the business. Last year our turnover was £500K, and we were able to hire two full-time employees.

“Although there have been many challenges along the way, I’m relishing in finally being a business owner. We have plans to expand our current range of clothing, and we’re hoping to get the attention of retailers in the near future. This should see our business grow from strength to strength.”

David English, Chief Marketing Officer at The Start Up Loans Company, said: “It’s fantastic to hear these success stories coming out of the Midlands and is a testament to the growing number of people in the region who are deciding to set up their own small businesses. With help from a low-interest loan, these businesses can find themselves scaling-up fast and making deals with large retailers in no time at all.

“It can be difficult to start your own business but Kokoso Baby and Mommamakes prove that with the right financial and mentoring support from The Start Up Loans Company, small businesses can flourish and grow, contributing to the UK’s economy.”

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What is Peer to Peer Lending?

Peer to Peer Lending is one of the newest alternative routes to finance which businesses can now turn towards in order to gain some access to finance

Also referred to as P2P lending, it is the practice of lending money to businesses through online finance platforms that work to match lenders with borrowers. As the peer to peer lending companies who offer this route to finance generally operate online means they can often run with lower overheads thus providing this route to finance more cheaply than say the traditional financial institutions.

As a result, lenders can earn higher returns compared to savings and investment products offered by the high street banks, while borrowers should be able to borrow money at lower interest rates, even after the peer to peer lending company has taken a fee for providing such a route to finance.

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Most Business Grants are not 100% Free

Business Grants are perhaps one of the most recognised Routes to Finance by SME’s, and as such can be very sort after by many businesses as their first and most preferred option when seeking finance.

Over the last decade, the ability for a small business to be able to readily access a business grant has changed somewhat. Therefore meaning, that they are not currently so easy to obtain as perhaps they once were.

In the past, if a business wanted a business grant for £10,000 and they met the criteria as well as passing the subsequent and relevant checks. Chances are they could have been awarded the whole amount which they were seeking.

Today, however, it’s different, where a business seeks a £10,000 grant and the Grant Application is successful, they will more than likely have to Match Fund part of the £10,000 themselves. As there will be a stipulation as part of the criteria of the grant, meaning that only a percentage of the amount being applied for will be provided. Such an example is a 30% – 70% split – where the business would be expected to fund 30% and the Business Grant provides the remaining 70%.

At this current time for SME’s, it’s not uncommon for them to hear much talk about how easily accessible Business Grants are. So much so, that the current trend seems to be that businesses will pay online sites so as to be able to access the details of such companies providing such grants.

Sadly this will often result in disappointment and wasted money because such sites will only harvest the details of companies providing Business Grants in the local area. There are no conversations which take place to look after the interest of the business wishing to gain access to a Business Grant.

Whilst Business Grants are around and do change and get replaced regularly, they are in no way plentiful or easily accessible as you might be led to believe.

At Routes to Finance, we can advise you at no cost if there are any Business Grants which are available and suitable for your business and more importantly if you meet the criteria. We will not and do not mislead or provide false hope.

If you wish to know if a Business Grant is your best Route to Finance then lets us know.

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What is a Start Up Loan?

Start Up Loan is a government-backed Route to Finance, introducing the scheme to incentivise, help and assist those people who wish to start-up a new business.

The Start Up Loan product is by way of a personal loan which is taken on by the individual or individuals of the business at a more favourable fixed APR rate (6%) than that of offered by normal traditional high street lenders.

This type of loan also enables applications to be made between £1,000 and £25,000 over a 1-5 years repayment term. PLUS there are no setup or early repayment fees.

Coupled with a low-interest loan, all successful Start-Up Loan applicants are also able to access Free Mentoring from experienced advisers via localised Delivery Partners.