While losing a job can be one of the most devastating moments, you may be working on your business idea. It grants you more time to analyse the success scope in business. Alongside, you may be receiving unemployment benefits to survive through the phase. You can only claim the benefits until 188 days (almost 6 months).
After that, you should present proof of your trial to get suitable employment. The government may restrict the funding post that. If you get one, you should step down from the business idea. Using the benefits income for business establishment along with survival is challenging.
You can use the unemployed phase to research, plan, and develop the product/service idea. Alongside this, you should search for a suitable job opportunity. It would help support the state’s requirement and finance the business idea.
Once you get a stable employment opportunity, the government stops the benefits. Do not decline a job opportunity here. It would impact your benefits application.
The blog lists other options, like loans, that you can tap into to start your business.
What Options Can You Leverage to Fund Your Business Requirement?
There are ample business requirements like- funding the equipment, client meetings, financing the business idea, seeking venture capitalists, hiring, etc. In the initial business stage, you may not begin directly with hiring but need to market it.
It is where you need to ensure consistent cash flow. Until you get an apt job, you can rely on some options to finance your small business requirement:
1) Loan for the jobless
If you have been living on benefits and want the extra financial cover to meet your business needs, unemployed loans can help. You can use it for any business and personal needs for example, you must finance the project fees, HR regulations, equipment repair and purchase, supply costs, etc. If you receive minimal income in the form of benefits, you qualify.
Though these are only short-term and emergency purposes loans, you can seek a longer-term loan. You must check the overall costs of the loans.
We provide affordable loans to the jobless to meet any purpose quickly. The same-day loan approval and fund disbursal make it possible. You do not need to worry about the overarching interest costs as we only charge what you owe to pay.
You can qualify for a higher sum if provide additional income proof in the form of part-time income/freelancing/rental income, etc.
2) Self-Employment Income Support Scheme (SEISS)
It is a program that helps unemployed individuals finance their business needs. It is ideal for self-employed in need of constant funds.
The program helps unemployed individuals search for business ideas and research without any constraints of employment-search requirements. You can leverage the benefit as a self-employed if you have been working since the 2019/2020 tax year.
You can use it to start your business or market your work. You can qualify if you recorded a profit of less than £50000 in a financial year. Precisely you would need to reveal that your business has been affected adversely as part of the process to claim it.
If receiving universal credit as an unemployed, you must send the earning information to DWP after the assessment period ends.
3) Bad Credit Loans
You may qualify for these bad credit loans if you earn part-time or receive universal credit payments. With us, you can get anywhere for up to £10000 for your business needs. It is a collateral-free loan. It is ideal for individuals with bad credit history. We analyse the operational years before providing loans to the unemployed.
If you have a strong business plan and have a client base or project at hand, we could approve the loan. Apart from the business plan, your credit profile must reveal a stable balance.
Ensure a stable credit report profile time of the loan application. If your credit profile reveals balanced finances with permanent address history, we provide a direct loan on your bad credit profile. It is a same-day process. You can pick the repayment schedule appropriate to your personal circumstances. We do not urge you to accept a particular structure. You pay a fixed amount at fixed interest rates. By making regular payments on the loan, you can improve your credit score too.
If you need a higher sum at bad credit, consolidate your debts at bad credit. It would help you simplify the loan payments and get the money to finance the business needs.
4) Monthly Installment loans
Unemployed individuals struggle to maintain regular loan payments and fear default. We try to eliminate any such hassle with easy repayments; instalment loans grant greater flexibility. If you believe you cannot pay the amount in one lump sum, split it.
We understand managing a business as a self-employed or an entrepreneur becomes tasking. You can check up on these loans to exercise more flexibility than personal loans.
You can qualify for a better interest rate and higher sum. Self-employed can provide a copy of their self-assessment along with business revenue figures. If the figures are promising and you have done it in the past, you may qualify for an amount with us.
You can reduce the monthly loan payments by choosing longer repayment tenure. It may increase the interest rates slightly. You get the loan if you have been paying your bills timely by making regular or partial payments on your pending loans.
You do not need to worry about the credit imprints or credit checks because we only conduct a soft one. It does not impact your credit score. If you want, you can choose a flexible repayment. Here, you can pay the repayment in a lump sum. You can also increase the payments or reschedule if you get employment. We allow you to clear the loan early if you want to.
Bottom line
Paying for business expenses or starting a new business as an unemployed is financially challenging. You can give wings to your business idea with the above affordable ways. Identify whether a particular loan meets your business need or not. Move further if it does not impact your financial bottom line. It is critical to ensure comfortable finances when unemployed. If you find any loan suitable, contact us for further information.
Anna Johnson has more than 11 years of experience in direct lending industry of the UK. She is the Senior Content Editor at 24cashflow where she is leading a large team of loan experts. During her career, she has helped the loan aspirants to use the particular loans in the best way and improve their financial lives and status.
Anna Johnson is known for her in-depth research of the UK loan marketplace, as she has worked with many major lending firms in her career. During her educational phase, she has done a research on ‘Finance Fundamentals for Growing Business’.