Funding for start ups and small business

The UK provides a very fertile environment for start ups and small businesses – arguably one of the best in the world.

Sometimes it is possible to get a business off the ground using your own resources, or by beg, steal or borrow, other times it is necessary to seek external funding, ranging from a small sum to buy essentials through to substantial sums for plants, equipment or global expansion.

The good news is that there is a lively and creative market for start up funding.

The less good news is that getting access to that funding isn’t easy. It never was, never will be, it’s not supposed to be. The core reason for that is that anybody looking to help you financially wants to know that:
  • You have thought things through
  • You are prepared to commit a lot of effort to making your business work
As a starting point, you need to create a (fairly simple) business plan and projection. In reality, you really should be doing this for your own purposes, irrespective of whether you are looking for funding. These documents give a great insight into what you are getting into.

From a funding perspective, these documents add value in a number of ways, giving clarity on how much you need, what type of funding and how you will be able to repay it.

The key questions that always emerge from this point are:
  • What type of funding is right for me?
  • Where can I get hold of it?
  • Can the business work without it?
Following articles will investigate the types of funding in more depth but in simplistic terms, it boils down to debt or equity. Where debt is money that has to be repaid, often in even monthly or quarterly instalments, and equity is money put in by investors in return for a slice of the action. They will seek returns from fees, dividends and a final exit.

Sources of finance are many and varied, starting with friends and family (often referred to as "the three Fs", the third F being "fools"!). Where that isn’t appropriate there are numerous potential options ranging from Government initiatives, banks, big corporates and small businesses.

The choice of funding source must follow the choice of which type of funding is right for your specific business proposition.

Through the series, we will look at the various types of funding, what the funders are likely to look for in a business, and how to find them.
Staff
Northampton, UK
UKBF exists as a place for discussion and advice for those who don't have anyone around them to ask questions or sanity check a thought process. A community of small business owners and side-hustle entrepreneurs to come together and grow their businesses.

Join Here and let's grow your business together!
Join UK Business Forums for free business advice