Invest in early


Read our guide to raising finance from friends and family for more information. Although a business owner can choose to pay themselves in dividends or through a salary, taking too much out of the business to simply sit in your bank account can result in a hefty tax bill. Conversely, allowing profits to mount up in your business account means this money isn’t actively working for you or the company. The right choice of business investment will depend on your personal circumstances. If you’re making a healthy profit and can afford to forfeit some of it, then reinvestment profits may be the most efficient option. AIV Capital has announced investment into alternative food business, Eat Just Inc.

Some funds target a higher return of up to ten times, although these are the higher risk investments. As investments in start-ups are high risk and ‘illiquid’ , you should consider consulting an independent financial adviser before making the decision to invest. Another option is a ‘fund campaign’ where the crowdfunding platform runs an investment fund covering a number of start-ups, although these are rare. Some platforms also offer ‘cohort campaigns’ which allow investors to become shareholders in a number of start-ups, managed by a campaign organiser. I can wholeheartedly recommend this book to anyone looking for a good in-depth introduction/in-depth system to business angel investing.

ABF can help you secure the right financing for your growing business and discover more about a business investment account. “Angels Den did an excellent job at the selection stage, investor introduction stage and provided a wonderful platform for us to raise angel funding. They are great people with great startups; no non-sense approach. Love them.” Investors usually pay an initial fee of between 2 – 5%, in addition to an annual fee of around 1 – 2% and a performance fee (which can be as high as 20% of profits made). Investors are dependent on the fund manager delivering on their exit strategy to return money to investors, and dividends are rarely paid.

Business Investing

Luckily, many other business leaders have been where you are now and all recognise the importance of knowing the right time. Having worked in investment banking for over 20 years, I have turned my skills and experience to writing about all areas of personal finance. My aim is to help people develop the confidence and knowledge to take control of their own finances.

What taxes do small businesses pay?

Finally, debt funding from a bank may be most appropriate if you want to keep a 100 per cent equity share but can’t afford to sacrifice a large chunk of your profits. Employee benefits are a very popular and effective form of people investment. An attractive package might include a good workplace pension, flexible working, extra holiday, company car schemes, cycle-to-work schemes and season ticket loans to name just a few perks. These can appeal to new prospective recruits and can be cheaper than offering more salary. Middlesbrough’s investment strategy will transform our local economy, create employment opportunities, and ensure that Middlesbrough is an attractive place to live and work for generations to come.

  • Cash can then simply be transferred to the main business account to be directed into the investment needed.
  • Investing in start-ups, or early stage businesses, is no longer the preserve of high-net-worth individuals, thanks to the boom in crowdfunding over the last decade.
  • Luckily, many other business leaders have been where you are now and all recognise the importance of knowing the right time.
  • Savings are a safer form of debt than many others, such as commercial loans, because you’re not automatically committed to a fixed amount of capital, unlike a bank loan or private equity investment.
  • None of the information provided is investment or tax advice and we always recommend you speak to a financial adviser before investing.
  • Our Access Accounts allow you to invest quickly and easily, whilst giving you the option to select your preferred access times in normal market conditions, though please note that access times cannot be guaranteed.

The Community Shares Unit is a dedicated support service to promote community shares. It provides resources including ‘The Practitioners’ Guide to Community Shares’ to help anyone wanting to offer community shares. Small companies, meanwhile, will be taxed on any ‘basic financial instrument’ investments once they’re realised. However, other investments, for example any commodities such as gold or oil, will need to be declared on your annual tax return. Depending on the size of your business, your corporate tax obligations will look very different.

What types of investments are available?

Lots of small businesses fail to invest properly in their own growth, so it’s important to know when to get extra help and how to go about seeking investment. You can explore all the latest content on business, investing and entrepreneurship from our partners. As an investor or an entrepreneur you can find curated content from business and investment professionals keen to help others through their wealth of experience. If the investors like the idea, they invest their money into the business. Where you have explicitly consented to be contacted for such purposes, we use your personal data to provide information on our new and existing products and services. A commitment by financial services firms to improving female entrepreneurs’ access to tools, resources and finance.

All about small UK business investment

You have the right to request access to, correct, delete your personal data. You can also withdraw consent to processing of personal data, raise objections and use other rights granted under GDPR (i.e. right to data portability). Furthermore, we will transfer your data to Trusted Partners outside the European Union – to the USA – under the EU-U.S. Please read the details regarding the processing of your personal data and if you agree with the processing as described below, please click the ‘I agree’ button. VCT, smaller and unquoted company shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange.