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Business finance advice scheme

We have been working with the UK Government and other accountancy bodies (ACCA and ICAS) on a service which enables businesses to identify qualified accountants who can provide independent advice on business finance – the Business Finance Advice scheme.

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Business Advice Service

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The UK government wants to encourage entrepreneurship and ensure businesses have access to a wide choice of independent, professionally qualified advisers across the UK on a range of business finance options. Qualified accountants who provide these services to small and medium sized businesses will be able to use the new government endorsed 'kitemark' from January 2013 to promote their services.

This new scheme has replaced the existing SME Funding Adviser scheme.

Are you looking for an independent funding adviser?

If you’re looking for independent advice on business finance you can find a qualified expert through the Business Finance Advice scheme. Find your local ICAEW Chartered Accountant offering the Business Finance Advice scheme here.

For wider financial advice, you can get a free consultation from an ICAEW Chartered Accountant in the ICAEW’s Business Advice Service. Find your local ICAEW Chartered Accountant here.

ICAEW firms – what this means for your firm and how you can join the new scheme

To qualify as a Business Finance Adviser, ICAEW firms must be able to offer small to medium sized business advice on the following areas:

  • Business plans
  • Business start-ups
  • Small scale equity issues
  • Bank loans and overdrafts

To register your office/firm in the Business Finance Advice scheme, all you need to do is opt in using the 2013 Find a Chartered Accountant directory entry communication.

All firms in the Business Finance Advice scheme will be able to use the ‘kitemark’ symbol in their own marketing, which will also be shown against your 2013 Find a Chartered Accountant directory listing.

If your office/firm is already a member of ICAEW’s Business Advice Service (BAS), you can additionally opt in to the Business Finance Advice scheme, giving two ways to differentiate your firm from competitors. The Business Finance Advice scheme has replaced the SME Funding Adviser scheme.

Important note

Firms can only conduct regulated investment business if they are regulated by the Financial Services Authority (FSA) or a Designated Professional Body (DPB) such as ICAEW, or are appointed representatives of other FSA authorised firms.

For further guidance:

What is the difference between the Business Finance Advice scheme and the ICAEW Business Advice Service (BAS)?

The new Business Finance Advice scheme is an industry led initiative that is supported by the Government. ICAEW firms that register as a Business Finance Adviser offer advice on how to access finance such as bank loans or outside investment, but are not required to offer businesses a free initial consultation. Find your local ICAEW Chartered Accountant offering the Business Finance Advice scheme here.

The ICAEW Business Advice Service (BAS) was launched by ICAEW in September 2011 and plays a vital role in the business support landscape. ICAEW firms in BAS offer start-ups and small to medium size businesses advice on a wider range of finance and business issues, from planning and starting up, to managing and growing your business. The first consultation is free of charge. ICAEW are continuing to promote BAS, driving potential new business to ICAEW Chartered Accountants. Find your local ICAEW Chartered Accountant offering the Business Finance Advice scheme here.

Specialisations

Business plans

Covers the review and preparation of a business plan, right from the start and including its purpose, how it will develop its target audience, and how it will be used. The aims of a business plan should be to:

  • consider the most appropriate forms of finance for the business, including consideration of debt finance such as banks loans, overdrafts, leasing, invoice finance and export finance, as well as equity finance;
  • provide advice on how financial institutions make credit decisions;
  • consider the growth and changing finance options during the life of the business to help secure finance;
  • provide details and focus on the business’ objectives;
  • be a benchmark for the future;
  • be a tool to see how the business is managed;
  • test if the business or a new income stream is viable;
  • test if a new market is viable;
  • improve the business and help identify inefficiencies; and
  • ultimately to give the business the best possible chance to succeed.

Consequently the plan will need regular updates and will be very comprehensive. It will include details of markets served by the business, such as export markets, the products or services provided, the history of the business, details of the management team, the business operations and the amount and intended use of the finance required. Exit opportunities for investors will also be considered.

When preparing or updating the plan, the key points in the lifecycle of the business will need to be considered. The life cycle changes could result in the need to take on more staff, the opportunity to move into new markets (for example exporting or a new type of customer), the requirement to invest in new premises or other assets like plant and equipment, the opportunity to invest in new products and services, the need for more working capital to hold increased stocks or debtors, or to negotiate better terms with suppliers.

The business will need to consider its ability to cope with the change and its financial needs. It will carefully look at all the options that are available, including:

  • increasing equity;
  • making the most of its assets by looking at asset based finance options;
  • looking at the alternatives to the traditional overdraft for short term finance, including peer to peer lending; and
  • using export finance including guarantees and insurances.

Where a business plan is in support of an application for finance or investment, the length and details included will vary according to the type of finance being sought.

Business start-ups

Covers the requirements of a start-up business and considers the most appropriate forms of finance.

It will include personal funding of a new business that may come from any assets that the entrepreneur has, including personal savings. It also includes finance from friends and family.

A written agreement with details of the terms of any financing may also be considered.

Small scale equity issues

Covers raising finance from director shareholders or business angel investors, without making a public offering. It will also include consideration of the tax incentives and conditions that are available under the Government’s enterprise initiatives, such as the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCTs).

Bank loans and overdrafts

Covers the funding options available and how applications for loans and overdrafts should be structured, the security that might be required from the applicant, and the likelihood of success of an application given the borrower’s track record.

Consideration of the appropriateness of business support scheme options, such as the National Loan Guarantee Scheme (NLGS) and Enterprise Finance Guarantee (EFG) scheme, is also a requirement.