Thinking about starting a waste & recycling business but don’t have the funds? You’ll be pleased to know that various funding options exist for a business like this. Below, you’ll see the four best options and how they help you secure the money you need to start your business venture:
R&D Tax Credits
The government currently has a scheme that lets you claim back a large portion of your development costs every single year. It’s called the R&D Tax Credits scheme, and it works like this. Every year, you can claim up to around 32% of your research and development costs. This includes things like staff costs, contractors, and so on.
It’s suitable for a recycling business because most of your work revolves around research & development. You develop new ways to recycle waste and figure out the best ways to lower carbon footprints. In effect, you could potentially get a loan to start your business, then use R&D tax credits to help pay it off at the end of the year. Then, you can keep getting money back and use it to grow your business year after year.
Some government grants exist to provide new businesses with extra funding. There’s one called the Low Carbon Innovation Grant, which might be suitable here. It covers lots of costs relating to technology development for things like waste processing recycling. So, if your business is all about creating a new and effective way of recycling waste, then it may be relevant. You can get between £1,000 and £50,000 here.
The Environment Now is another grant that can be useful. If you’re between the ages of 17 and 24, then this programme can give you up to £10,000 to fund your idea. All you have to do is prove that you’ve got an idea that utilises technology to solve environmental issues – like reducing waste and improving recycling.
Raising Funds Through Equity
This is known as equity financing. The shorthand is that you raise money by selling shares in your business. Investors can buy these shares, and you use their money to fund your company.
The benefit is that you don’t owe anyone any cash, so it’s potentially better than having a loan hanging over your head. The downside is that you’re giving away part of your business, which means the money you make goes to the investors depending on how many shares they own.
This is a way of borrowing money by securing the loan against an asset. Typically, this is used when purchasing machinery or equipment for your business. The loan is secured against the asset that you’ve acquired. If you fail to pay back the money, then the asset is seized.
It’s a smart way to help fund your business and get some of the vital equipment you need. Just make sure you keep up with repayments, or you risk losing essential machinery that affects your entire business operation!
There you have it; four different ways to fund & grow your recycling business. Consider each option, weigh up the pros and cons, then decide which one works best for you. They’ll help you get the money you need to start your business, and they also help you gain some extra cash to invest in your company and grow it.