Don't overstretch too soon. Try and keep costs down to minimal so you can make money to buy better stuff.
The reason I say this is because you clearly are clever at business to be making £500 a week from one customer, so if you can get orders like that again in the future you can soon upgrade to better equipment without any loans or debts.
Ask family or friends for any money, but don't ask for too much, instead it might be a good idea to have a scheme where for £50, they will not only help their relative/friend to succeed, but you will mail them a free box of 6 cupcakes every month for the first year as a way of saying thank you. Yes, they will be expensive cupcakes and in the long run you may lose money but it will be a good early injection into the business and cheaper than any lone, and the cupcakes will be a nice thank you every month for those that believe in you.
Definitely look for second hand equipment, but being in Lockdown and Covid-19 you might also do well at entering into business right now because for starters, be cheeky and ask for a reduction on the unit to see if you can get it cheaper. Check out any restaurants or cafes or other food places that are struggling and about to close up forever, because you can swoop in and get some very expensive equipment for a really small price that will last you years before needing upgraded.
In fact, barter everywhere if you can because all businesses are struggling and needing cash injections and while it won't always work, you might find you get some really good early discounts when starting up.
Source out buying ingredients in bulk too. Going to a commercial website that sells 20kg bags of sugar might end up highly cost effective for a baking business compared to picking up bags of sugar from Asda. The same goes for chocolate, paper cases, and so on. Anything that you use a lot off, you should look to buying bulk from a reputable company that can supply direct in bulk so that it cuts your costs right down. Don't pay retailer prices when you don't need to, and although some of them will only supply free delivery or have minimum orders of £150, you can get a fair few different ingredients for that and not have to re-order for weeks unless you are selling them so fast.
Finally, consider whether to launch a subscription service using an online option like Subbly. For a small fee (the cost of a website) they will not only provide you with a website but also handle all the logistics of subscription services, leaving you to bake boxes of cakes and sending them to your customers. The benefits of subscription boxes is regular customers, and the ability to pre-plan. Boxes of cakes seem very popular right now, it might just be because of lockdown people are buying them but I know a local person in my village who is selling 100 boxes of 6 cupcakes a day from her home. If you have a bigger operation and operated on a monthly subscription box and had the logistics in place to expand it nationwide, there is no reason why you couldn't end up with 500 orders a day or more. With a profit margin of around £3-£4 an order, that could be £2000 profit a day which is more than enough money to expand further if you need to upgrade equipment, bigger premises or hire a second person to work with you to get the orders out.
My advice is to start as small and especially cheap as possible, and grow with experience. You clearly have experience on making sales, and baking, now you need to expand into a bigger operation, learn what is needed from being a proper business rather than a small cottage industry, and once money gets better, start to expand slowly but surely with confidence.
Good luck mate.
