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Last Updated: Thursday, 6 January 2005, 00:02 GMT
Money - getting it or giving it away
Money
Raising capital for your firm can be a tricky business

Looking to raise funds for your business, or perhaps want to give some cash away to a good cause?

This week's small business question and answer session is all about money.

Liz Barclays, presenter of Radio 4's You and Yours programme, looks at two of your queries.

QUESTION
Mohamed Ismail, UK
My question is regarding raising capital. I have a business idea which I think is a profitable one.

However, I am in debt and, apart from raising some money from family and friends, where else can I get finance from apart from the banks? What are my options and who can I contact or speak to?

ANSWER
Liz Barclay, presenter of Radio Four's You and Yours programme
Even if you wanted to approach the banks, they might not be interested. They tend to help people with big ideas who want large sums of money.

Business people seem to agree that it's easier to borrow millions than it is to borrow a few thousand pounds. That's why so many small business people end up re-mortgaging their properties and taking a risk with the family home.

There are people around who are business angels. They have some money to invest in business ideas they believe in - usually between 10,000 and 100,000 - and they have a lot of business expertise which can be useful to people who are starting out.

They will of course expect a share of your profits and you might not want to involve someone who would want a say in how you run your venture.

Venture capitalists are another possibility, but they are usually looking for investments worth 100,000 and more in return for a stake in your business.

There may be government help in the form of grants, development programmes or the Small Firms Loan Guarantee that you could apply for, depending on the business you're planning to start up.

The best source of information is your local Business Link. You will be able to find it in your local telephone directory or call the national number 0845 600 9006 or log on to www.businesslink.gov.uk

QUESTION
Qamar Ghafoor, London
How can a business involved in fundraising for charity improve its reputation? How can this extra effort be publicised without seeming too much like a PR stunt?

ANSWER
Liz Barclay, presenter of Radio Four's You and Yours programme
Good question!

Even big firms with long-term commitments to Corporate Social Responsibility programmes have the same dilemma.

The cynical public often assumes that involvement with good causes is just a gimmick to hoodwink us into thinking that businesses are good guys.

I feel that you shouldn't expect to enhance your reputation by publicising your own involvement in charity.

You should be involved because you really are committed to helping your local community. The charity will spread the word about your commitment.

If you do want to generate publicity, perhaps a better way would be to come up with a project that's likely to attract the interest of the local press and media.

For example, your company could set aside a sum of money annually out of profits.

Each year, you could ask charities or community organisations to compete for that money to run special projects and choose the best one to give the money to.

Or you could set up a scheme where you allow each of your staff to have some time off - paid for by you - to help out a charity or community project of their choice.

If you are genuine and committed, the right people will get to hear about it.


To ask Liz Barclay a small business question use the email form below.

Alternatively, you can email another member of our small business and entrepreneurship panel of experts by clicking on one of the links on the right.

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