Arden University: Start-up Loan Application Report - BUS0005NFBNM

This report, prepared by a student, examines the key elements of launching a business, focusing on the application for a start-up loan. It begins by exploring various legal structures businesses can adopt, such as sole proprietorships, partnerships, limited liability partnerships, limited companies, and business corporations, detailing their strengths and weaknesses. The report then analyzes three primary sources of finance for start-ups: business credit cards, invoice finance, and venture capital, evaluating their advantages and disadvantages. It further investigates the three main sectors within the UK economy, differentiating them and assessing their value. Finally, the report discusses the importance of two key HR policies within modern organizations. The chosen business for analysis is TESCO, and the report provides a framework for understanding the practical considerations of starting a business in the UK.

Apply For A Start up
Loan For Your
Business
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Table Of Contents
INTRODUCTION……………………………………………………………………………..3
TASK 1
A)Prepare a table which shows the various legal statuses of businesses that the business may
adopt. Find out about the strengths and weaknesses of these legal statuses…………………..3
B) What are the weaknesses and strengths for evaluating and identifying the three sources of
finance which are available for business start-up after considering the business idea………..5
TASK 2
What are the three sectors within the UK economy where business can be operated. Explain
about the differences between these three sectors? Describe about their value to the UK
economy……………………………………………………………………………………….7
TASK 3
Explain about the two HR policies and describe about their value into the current
organisations…………………………………………………………………………………9
CONCLUSION………………………………………………………………………………10
REFERENCES………………………………………………………………………………11
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INTRODUCTION
The business structure refers to that type of structure where it defines who owns the
company, how it profits are distributed and also explains which manager perform what tasks.
Business structure is necessary for the liability and tax purposes, as it depends on the
structure of the business. Under this head, taxes have been charged differently and managers
and owners in the event of wrong doing will have different levels of responsibility. In this
report, the analysis has been done on the various legal statuses of businesses that the business
can adopt. (Vernon, V., 2015).The analysis has been done on the strengths and weaknesses of
the three sources of finance which is available for the business start-up. The research has
been done on the HR policies and its importance into the modern work place. The chosen
organisation is TESCO. The imaginary business that can be included into this retail sector is
of the medicine business. TESCO is the multinational merchandise retailer. It is the leader in
the UK market. Its main objective is that to prioritise their customers and take care about the
needs and preferences of their customers.
TASK 1
A)Prepare a table which shows the various legal statuses of businesses that the business may
adopt. Find out about the strengths and weaknesses of these legal statuses
There are majorly five types of business structure which exist into real and practical world. It
has been discussed into the following manner:
SR.NO
.
Type Of
Business
Structure
Description
1. Sole
Proprietorship
It is the most common type of business structure named as the
sole proprietorship. A sole proprietorship is owned and run by
the only one person. (Raby, S. and Gregson, G., 2018). For
having the full control over the business, sole proprietorship is
one of the good option. It does not produce a separate
business entity. It includes both their personal income and
expenditure on business.
2. Partnerships Partnership refers to the two or more individual who owns
and operates the business together. Partnership can be
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considered either as the general partnership or limited
partnership. Under this head, they agrees on the common legal
terms and conditions. They are also known as the
unincorporated entities and they are self employed by nature.
3. Limited Liability
Partnership
LLP is a kind of different form of corporate business which
gives the advantage of restricted accountability of the flexible
nature of partnership and the company also. (Fischer, E.,
2019). It is fully liable for its assets and also is the unrelated
lawful institution. The accountability of the colleagues is
restricted to the agreed contribution in the LLP
4. Limited
Company
This kind of company has its own lawful identity. The
company’s financial aspect are different from the owners and
taxes have been charged into the different style. The company
always owns its profits and pays taxes on them. It distributes a
certain portion to shareholders as dividends and retains the
rest as in the form of working capital.
5. Business
Corporation
A business corporation is defined in the manner that which
provides the entity a different legal entity from its owners. It
is expensive and difficult in terms of setting up it. It also
required with more tax requirements and regulations.
Strengths of Sole Proprietorship: The main advantage of sole proprietorship is that it is
easy to set up. The owner needs to ensure that no one else run this type of business under the
same name.
Weaknesses of Sole Proprietorship: Under this kind of business, the owners are fully liable
for every kind of action. (Sibande, M. D. V., 2019). On the sole proprietorship, self
employment taxes has been applied on it. Business continuity has been end with the death or
departure of the owner.
Strengths of Partnerships: Under this kind of business, it bridges the gap in knowledge and
skills. A prospective partner always brings infusion of cash into the business. It also provides
a chance for distributing the financial burden for expenses and capital expenses which is
required for running the business.
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Weaknesses of Partnerships: If the partners entails for sharing the profits then they have to
share the liabilities as well. (Salamanca P, E. and Alcaraz, J., 2019). It can somewhere place
burden on the personal finances and assets. There is loss of autonomy under the head of
partnerships.
Strengths of Limited Liability Partnership: It is easy to start and manage the business like
the entrepreneurs. Under this head, there is no minimum capital requirement. Also there is no
limit on the owners of business.
Weaknesses of Limited Liability Partnership: The main disadvantage of LLP is the public
disclosure. The income is considered under the personal income category and also taxed
accordingly. Profits are also not retained in the similar manner as the company limited by
shares.
Strengths of Limited Company: There is no minimum capital required to form the private
limited company. It also act as the separate legal entity. Under this head, the liability is
limited for the person.
Weaknesses of Limited Company: Under this head, the ability of shares transferred is in the
restricted manner. The number of shareholders cannot exceed more than 50. Prospectus
cannot be issued to its public. Shares cannot be quoted, under the stock exchanges
Strengths of Business Corporation: Under this head, they are only liable up to the amount
of their investments. Under this head, the ownership of shares can be easily transferred to
another shareholder. Also there is no limit to the life of a corporation.
Weaknesses of Business Corporation: Under this head, they are considered under the
double taxation system. Due to various types of income and taxation then it needs a
substantial amount of paperwork.
B) What are the weaknesses and strengths for evaluating and identifying the three sources of
finance which are available for business start-up after considering the business idea
There are three famous sources of finance which are available for the purpose of
business start-up in terms of consideration of the business idea. It has been discussed in the
following manner:
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 Business Credit Cards: For trading entrepreneurs these are the handy source of
finance. Under this head, the free money is provided to the individual and which
needs to be paid off within the interest-at liberty time. If the individual is into the
dealing work and required such a facility, to an overdraft as it can be paid off on the
monthly basis, it can be a useful alternative. (Mathews, K., 2015). Instant purchasing
power is the best way to boost it. There are some disadvantages of it. Under this case
with strict repayment periods, the interest rates are high. APR can be exceeded up to
the 20% and the interest free period is only up to or in the typical manner is of 30 to
45 days. If does not paid off within a period of time, then it is easy to come under the
category of debt. It can act as the damaging and lasting effect on the company’s credit
rating.
 Invoice Finance: If the work is into dealing and revenue generation then it is the great
way to enhance the funding and cash flow can be raised on the fast pace manner. It is
specially for the service companies with long invoice payment terms of 30, 60 and 90
days. It is the best way for covering the gaps in cash flow where clients on the
frequent basis pay late or have the extended payment terms. For the purpose of
securing the invoice finance, the evidence has been required that the individual is
generating revenue and the customers are usually consistent in paying the invoices.
There are some disadvantages attached to it. Financiers need to be aware that they see
the detailed accounts before they buy the invoice as debt. In this case, if the product
sales or the hours of work does not note down into the particular manner then the
invoice can appear in approximate manner and could be challenged.
 Venture Capital: Through the venture capital, large amount of money can be raised. It
supports in terms of managing the risk which can be inherent into the most start ups.
With the support of an experienced team, it oversees the growth and operations. Start
ups have tendency to avoid major issues. Under this head, personal assets don’t need
to be pledged. For the growth of the business, there is no need to contribute for the
personal assets. When they exit from the business, many successful founders become
partners at the venture capital firms. (Mensah, and et.al., 2019). In terms of venture
capital firms, they spend most of their time building their network to assist the
companies to invest in. There are some disadvantages in the case of venture capital. In
this case, the founder ownership has been reduced. It is very difficult for finding out
the investors and also act as the distracting parameter for the founders. Funding is
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relatively scarce in terms of nature and it is very difficult to obtain it. Under this
parameter, overall cost of financing also act as in terms of expensive way.
So these are the advantages and disadvantages of the three sources of finance for the purpose
of business start-up.
TASK 2
What are the three sectors within the UK economy where business can be operated. Explain
about the differences between these three sectors? Describe about their value to the UK
economy.
The three sectors within the UK economy where business can be operated. This can
be explained in the following manner:
Internet services sector: This sector is very prominent in nature . Because according to the
current period of time, it ha been observed that due to pandemic situation when everyone is at
their home. (Weinfurter, D. J., 2017). Then most of the people are spending their time on
social media and also they need internet connection packages or services more as compared
to their previous situations. So it is a very good business according to the current need of
time. They are very different from other sectors also. Because their aim is that to earn
maximum profit while taking the advantage of this current pandemic situation. They focuses
on every age group of people. This kind of business is highly contributed into the growth of
the country. TESCO is the company which also deals with this sector. It is the company who
ca provide the services into the proper manner also.
Financial Services sector: This sector can play a major role while supporting their country’s
people. Financial services are those services which act as the parameter by coming up with
different kinds of offers for their customers. Here the financial institutions can act as the
supporting role where they can offer lower interest rates and gives some discounts and offers
while understanding this difficult situation. (Ghods, M. A., 2019).With the support system,
UK people somewhere sustain themselves in this pandemic situation. This sector business is
also very different from other sectors because the focus of the people is of the age group of
adults who are currently working as professionals or just joined the organisations as the
fresher. Their aim is to support their country’s people. Also it contributes in supporting the
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economy of the UK country in this pandemic situation. So this sector is very risky as well as
the profitable sector if played into the sharp manner.
Medicine Sector: This sector business can be considered into the imaginary way but it can
implemented into the practical world while having the proper knowledge and precautions
related to it. According to this pandemic situation where there is lots of requirement of
medicines and vaccines then it act as the important role into this real world. This kind of
business is focuses on every kind of people and every age group also. This particular type of
business not only help the country’s people but also act as the revenue earning parameter in
this difficult situation when other kinds of businesses got slow down or shut down. So in this
way also it is different from other kinds of businesses.
All these three kind of businesses play a very important role in terms of growth of the UK
economy. (Walton, B. C., 2016).Internet services sector business comes as the boom into the
current market because in this difficult situation when other businesses can’t run themselves
into the proper manner then this business act as the revenue earning parameter that’s why it is
very important for the country. For making the continuous flow of the money into the
economy of the country financial services sector gives their best shot to support and save
their country into the financial spectrum. Medicine business is the most beneficial business
because it is the major requirement of the market. And due to this kind of business it highly
supports the country into the stronger manner.
TASK 3
Explain about the two HR policies and describe about their value into the current
organisations
The two HR policies which plays a very important role into the current modern work
place. This has been explained into the following manner:
Health and Safety Policy: A health and safety policy describes about the course of action
which has influenced the organisation decision-making and also guide towards the actions for
the health and safety. Body of regulations has been commonly exist with these kind of
policies which has been described at the level of government and also implemented by the
offices. Most businesses have set out their policies into three sections. (Hussein, M. H.,
2015). Under the statement of health and policy at work which has set the commitment for
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managing the health and safety into the effective manner and also needs to understand what
an individual wants to achieve. There is a section which is responsible for the actions that
who is responsible for the particular actions. A written general health and safety policy
demonstrates that to the managers, supervisors and workers there is a commitment for
ensuring the higher standards for health and safety. This kind of policy sets out the general
approach and commitment together with the arrangements that an individual put into place
for managing health and safety into the business.
Equality and diversity policy: Under this kind of policy, it is a kind of written document or
agreement for the group which tells about how to avoid the discrimination against people and
it is also about creating the safe and inclusive atmosphere for the members and service users.
It is about protecting the employees regarding the inequality, cheating and giving importance
to specific person without any reason. Its all about the equality and diversity which should be
provide into the workplace. (White, J. E., 2019).This policy is about giving the equal
opportunities to each and every member of the organisation. This policy covers the point that
the existing staff and job applicants and workers should be treated in a fair manner in the
environment which is free from any kind of discrimination. Al the women employees and
fresher s should be treated in a well mannered way so that they can work in the organisation
in a fair manner and also privilege to be given and support system should be there for the
pregnant women. In this manner, pregnant women can also perform their roles and
responsibilities in a positive manner. Without discrimination positive growth can be possible
within the organisation and organisation can achieve their goals into an effective manner.
These policies have their importance into the modern workplace because of the certain
reasons. (Wakeel, A., 2019). Health and safety policy plays a very important role into the
organisation. Because without the provision of these kind of policies it is impossible to
support their employees in terms of their health and safety into a legalise manner. If there are
provisions then the employee will feel relaxed and cool and they can give their full potential
in terms of achieving their organisational goals. Health and safety policy ensures that in case
of any emergency the organisation will give first aid on the priority basis which they can
done on the initial level for saving the life of an employee. Sometimes organisation can
support their employees in terms of financially in the case of major injury. Under the case of
equality and safety policy, it is very important into the current period of time. Because people
are following false approaches and ways for getting the success in a shorter period of time.
Due to which inequality and discrimination situation has arises in the organisation. As a
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result the equal opportunities will not be provided to each and every employee working in the
organisation. If the opportunities will not provide in a vast and equal manner then it becomes
difficult for the organisation to grow into an ethical manner. If the employees do not
experience the diversity in their working field then it becomes challenging for every person to
grow into a fast and positive manner. (Kapinos, and et.al., 2016).Equality and diversity gives
an opportunity to grow themselves into their personal as well as in their professional way
also. These kind of policies are very important not only for the employees welfare but it is
also essential for the positive growth of the businesses.
CONCLUSION
Applying for the loan for the purpose of start up. It needs to follow lots of procedure
and also needs to do lots of planning, strategise into the proper manner, assessment also
needs to be done over there. Start up business are those kinds of business who needs lots of
preparation in terms of market analysis, what is current requirement of the market, whether
the customers will be comfortable with their products and services or not. (Sammartino, S.,
2017). For getting the loan as per the requirement then the individual has to explain about
their business to the financial entity so that they can trust them and also analyse that whether
they are able to repay the loan amount in the proper manner or not. And this should be done
into the within a period of time so that the financial entity need not to become harsh with the
loan applicant. That’s why applying for the loan in terms of start up then it should be
carefully done with the proper baby steps taken by them.
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REFERENCES
Books and Journals
Sammartino, S., 2017. The Lessons School Forgot: How to Hack Your Way Through the
Technology Revolution. John Wiley & Sons.
Kapinos, and et.al., 2016. (Un) expected housing price changes: Identifying the drivers of
small business finance. Journal of Economics and Business, 84, pp.79-94.
Wakeel, A., 2019. Financial performance analysis of IDLC Finance Ltd and prospect of
IDLC SME products in Future.
White, J. E., 2019. Relationship Between SBA Loans, Personal Capital Finances,
Government Regulations, and Business Profitability.
Hussein, M. H., 2015. The relationship between credit accessibility and growth of small and
micro enterprise in Langata Constituency. University of Nairobi.
Walton, B. C., 2016. Is emotional intelligence predictive of entrepreneurial success?.
University of Pennsylvania.
Ghods, M. A., 2019. Entrepreneurial marketing: the missing link in social enterprise
studies. Journal of Global Entrepreneurship Research, 9(1), pp.1-12.
Weinfurter, D. J., 2017. Second Stage Entrepreneurship: Ten Proven Strategies for Driving
Aggressive Growth. Springer.
Mensah, and et.al., 2019. Entrepreneurship development and new business start-ups:
challenges and prospects for Ghanaian entrepreneurs. African Research Review, 13(3),
pp.27-41.
Mathews, K., 2015. Crowdfunding, Everyone's Doing It: Why and How North Carolina
Should Too. NCL Rev., 94, p.276.
Salamanca P, E. and Alcaraz, J., 2019. The rise of Mexican entrepreneurial migration to the
United States: A mixed‐embeddedness approach. Thunderbird International Business
Review, 61(2), pp.197-215.
Sibande, M. D. V., 2019. The perceptions of township entrepreneurs of interventions required
to reduce the high failure rate of small, medium and micro enterprises (SMMEs) in
ekurhuleni (Doctoral dissertation).
Fischer, E., 2019. A Framework for Entrepreneurs to Assess Business Accelerator Programs.
Raby, S. and Gregson, G., 2018. From starting to scaling and beyond: how do entrepreneurs
and SMEs innovate and grow. The Business Environment: Themes and Issues in a
Globalizing World, p.421.
Vernon, V., 2015. Reactive Messaging Patterns with the Actor Model: Applications and
Integration in Scala and Akka. Addison-Wesley Professional.
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