Getting money to start a new business isn't easy, especially if you have no formal business experience.

Sheffield hairdresser Caroline Channer had just that problem when she decided to open her own salon.

Caroline had the hairdressing skills, but she had no experience of running a business. And banks like a safe bet when they're going to lend money.

But Caroline got the �5,000 she needed. Instead of pursuing a bank loan, she got help from a new scheme whereby established businesses put up the cash newer ones need.

It's called the Sheffield Employment Bond. And here's how it works.

Established businesses contribute by buying a bond. They don't earn any interest on their investment, but they do get their money back at the end of five years.

Booming

In the meantime, that money is given out to new companies like Caroline's, in the shape of a low-cost loan.

The money has allowed Caroline to set up her Afro-Caribbean Salon. And business is booming. Since starting up she's taken on four staff.

Peter Edwards' firm is one of those putting money in

The interest on the loan is much less than she'd have to pay if she'd borrowed from a bank, and she's got three years to repay it. Without the cash Caroline says she wouldn't have been able to get going.

Peter Edwards is one of Caroline's benefactors. His engineering company, Donvale Holdings, has invested �10,000 in the scheme.

Donvale Holdings is a family firm. It's been in Sheffield for more than 100 years. Once, it was surrounded by steel mills, but most of these jobs have now gone. Peter wanted to do something to help regenerate the community.

Contributions

Mike Lancaster is another beneficiary of the Sheffield Bond. After being made redundant in his 50s he worked as a volunteer careers adviser.

A grant from the scheme allowed a local careers service to employ Mike full-time. Since then he's been able to help more than 50 people find work - many of them older people like himself.

In all more than 500 businesses in the Sheffield area have backed the bond. Contributions ranged from �200 up to �80,000. It raised a total of �786,000.

Much of that money was then matched by European funding. Hundreds of Sheffield businesses have benefited.

And Citylife, the organisation that promotes the scheme, is now expanding it to Newcastle and London - the latter in the form of Boost London.

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Student Guide

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"Good" business usually means that a company is making lots of money. It can mean something else as well.

A good business will be looking after its neighbours, the environment or contributing in other ways to society.

In Sheffield companies banded together to create a fund to help people get their business projects off the ground or find jobs.

Contributors put money in by buying a bond. They don't get paid any interest, but all their contributions will be returned after five years.

The scheme has made a big difference because most young entrepreneurs find it very difficult to raise money to invest. The Sheffield Employment Bond provides them with low-cost loans.

The scheme is spreading around the country

In effect, Sheffield's stronger businesses are letting the weaker ones use some of their cash for a few crucial years.

The bonds are promoted by an organisation called Citylife, which is trying out the same idea in Newcastle and London.

Once the schemes have sold enough bonds, they qualify for extra money from the European Union. As the funds grow, they can offer grants to local housing projects and organisations which help people find work.

Just think...

Have a look at the Lunch Lesson and work out how the money from the Sheffield Employment Bond has made a difference to the businesses which have received help.

How does Sheffield benefit from the development of these businesses?

How to be 'good'?

Citylife works by helping people to help others. Many businesses have their own ways of helping others. Whichever way they go about it, the effect can be the same.

There are all sorts of ways in which business are "good".

• Companies often have projects aimed at protecting the environment. Have you seen any adverts on the television?
• Many big businesses have projects aimed at helping young people. Have you been involved in any?
• Some businesses put litter bins round town or sponsor the upkeep of the plants in the middle of a roundabout. Keep your eyes open for them.
• Many businesses take work experience students. Which businesses does your school use?
• Some businesses are interested in the local area; others have national or international activities. Look out for business names everywhere.

Just think...

Have a look at the websites of some "famous names" like www.nike.com , www.bp.com or www.unilever.com. Find out how they are contributing to society.

Have a look round your town to see which businesses are helping the community. Are there businesses that help your school?

Don't forget that when people from business come into school, they are giving up their time to help you.

Why be good?

Customers are one of a business's stakeholders. They expect to receive the quality of products that they pay for and will come back if they feel they are getting value for money, good services and all those other things that persuade customers to be loyal.

One of these is image. Customers can quickly go off a business that seems to be behaving badly so it is important to maintain that good name.

Just think...

Can you think of any businesses which have lost their good name because they have behaved badly. A web search for "corporate responsibility" or "social responsibility" will find some examples.

Win - win

Businesses try to match their activities to appeal to the potential market for their products.

• If it is a product for young people, it generally is involved in activities that are targeted at young people. Have a look at the Tango website, www.tango.co.uk.
• Oil companies are often challenged because of the effect that they have on the environment so they like to be seen contributing to its improvement. What else do they do?
• Banks are involved in a range of activities because they have a wide range of customers. Have you noticed any banks' contributions?

As a good name persuades people to buy more of the product, businesses are happy to put money into activities which will help them to develop and keep a good name.

Such money can be well spent if it attracts new customers or helps them to keep customers in difficult times.

Just think...

Is a business's corporate responsibility activity a contribution to society, clever marketing or a mix of the two?