If you need funding for your start-up or early-stage business, a government-backed Start Up Loan might be one of your options. As part of your Start Up Loan application, you’ll need to produce a Personal Survival Budget (PSB).
So, what is a Personal Survival Budget, why do you need one, and how do you put it together?
To give your application the best chance for success, our Start Up Loans Officer, Jo MacEachen, shares her top tips.
Why Do I Need a Personal Survival Budget?
Getting your PSB right is key. Not only in helping you understand your finances, but in helping your lender to process your application efficiently.
Furthermore, the PSB helps you understand how you will repay your loan as your business gets off the ground. It also shows whether your sales are in line with the forecast. As well as this, it shows how much you’ll need to pay yourself to meet your living costs.
From a lender’s point of view, the PSB helps us to understand your personal financial situation. As the Start Up Loan is a personal loan, this information is essential when assessing your application.
Moreover, it shows the credibility of your cashflow forecast. Evidencing that your cashflow forecast outgoings match the outgoings on your bank statements and your PSB, provides a reliable basis for assessing the accuracy of your business’ predicted income and expenditure.
What Should My PSB Include?
In a nutshell, the PSB provides a breakdown of your continuing monthly personal income and expenditure. It should capture all your usual outgoings, including your non-essential spending.
The key bit of information here is that your PSB needs to match your bank account statements.
If you have more than one account, you will need to ensure that your stated incomings and outgoings reflect what is happening across all your accounts.
The PSB should include all your personal income. It should not include income from your partner, family, or friends, nor any income that will stop when you start the new business.
We often find that applicants overlook critical information that could help their case. For example, child benefit payments and/or tax credits should be included – but only if they will continue.
Indeed, even these small details help to paint a fuller picture of your finances.
Your PSB and Your Cashflow Forecast
As part of your application, you will also need to produce a cashflow forecast (CFF).
The CFF will include the wages you plan to pay from the new business as well as the direct cost of sales and running costs.
If you’re using the Start Up Loans Business Plan template document, the minimum amount needed to meet your personal living costs will pull through automatically from the PSB to the CFF.
Having a good understanding of the wages you’ll need to take from your business helps us to better understand how much you need to earn from sales each month to cover them and your other running costs.
This in turn helps you to assess the viability of your new business, and its ability to meet its outgoings and the proposed loan repayments.
Getting Support with your Personal Survival Budget
Of course, we understand that working these things out is not always straightforward!
If you’re struggling to put this information together, we recommend that you pick up the phone and call your dedicated SWIG Finance business adviser – sometimes it’s easier to talk these things through.
To recap, the quicker you can provide this information, the quicker your application can be processed.
About SWIG Finance
SWIG Finance is a non-profit company that supports viable Southwest businesses that can’t secure sufficient funding from their bank.
We are a leading delivery partner for Start Up Loans, a government-backed scheme providing an affordable source of finance for new and early-stage business owners. To find out more about Start Up Loans, please visit our dedicated website page.
SWIG Finance is growing every year. In 2021/22, we lent £10.8m to 502 businesses, helping to create and secure over 1,000 jobs and generate £32.3m.
If you’d like an informal chat about your funding requirements, get in touch with our friendly and professional team to see how we can help: info@swigfinance.co.uk / 01872 227 932.