Peter Ranscombe finds out about Virgin’s plans to not just offer finance for start-ups but also advice and mentoring to help them survive.
Sir Richard Branson’s Virgin Group has become the latest player to enter the start-up loans market in Scotland. His Virgin Startup (VSU) unit joins DSL Business Finance, the Prince’s Trust, Transmit Start Ups and X-Forces as the delivery partners for the Start Up Loans Company (SULC), which was set up by the UK Government in 2012.
VSU has allocated £15m to 15,000 businesses in England during the past three years. As well as offering funding, the company provides business advice and mentoring to its start-ups. Personal loans for business purposes of up to £25,000 are on offer from SULC at a rate of interest of 6% a year.
Branson says: “I’m delighted the first Virgin StartUp Scottish businesses have now
received funding. Scotland has always been a place close to my heart – my wife Joan is a proud Glaswegian and my parents are from Edinburgh.
“I know Scotland is a place where new businesses can thrive, which is why I hope more follow suit and the funding, mentoring and business advice on offer through Virgin StartUp for Scottish entrepreneurs will act as a springboard for new businesses for many years to come.”
The first two Scottish companies have taken out loans of £25,000 each through VSU. Mohsin Muhammed from Fife is setting up confectionary subscription service lovesweets.com, while Aberdeenshire-based Gillian Poskit is using the cash for her Bin Bath cleaning service. “There are many challenges in starting a business,” Muhammed says. “Building and maintaining an awesome team, creating a great product and getting your business exposure.
“Firstly, I chose VSU because it is the ultimate entrepreneurial brand. As well as its support, I was matched with business adviser, David Christie. He’s helped me with my cash flow forecasts and business plans – he was instrumental in helping me get my business plan approved. And it doesn’t stop there; I also got a business mentor for my first year, Jo Long. She’s helping me with kick-starting the business. I would like to pass on my sincere gratitude to the entire VSU team.”
Poskit adds: “I have always had an entrepreneurial spirit and have had numerous light-hearted, fleeting conversations with friends and family about what my ‘thing’ could be. And it turns out, it’s cleaning wheelie bins.
“It was by chance I was introduced to the VSU loans by David Christie, and on every level it fits with my values. I have a strong moral code – I lead with the heart and do the right thing based on these morals and I want Bin Bath to remain true to these ethics and I feel Virgin is a company with similar values.”
VSU’s Scottish operations were launched on 1 November at Virgin Money’s offices in Edinburgh. Claire Oldfield, a former Sunday Times journalist and now managing director of communications and marketing agency Wardour, hosted a panel discussion between Stagecoach bus and train group co-founder Sir Brian Souter, former hedge fund manager and now Gabriel business angel Margaret Coughtrie, and Glasgow Tedx talk curator Gurjit Singh Lalli.
All three speakers highlighted the importance of entrepreneurs finding the right mentors and of taking advice about how to start and run their business. They also pointed to the importance of capturing early sales instead of relying on equity investments or grant funding.
The British Business Bank runs SULC on behalf of the Department for Business, Energy & Industrial Strategy (BEIS), previously the Department for Business, Innovation & Skills (BIS). In November 2015, the then Chancellor, George Osborne, recapitalised SULC with a further £108m through to 2020, on top of the £131m already invested in the loans provider.