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Sources of finance for a business

The most successful approaches to securing finance for a business can differ depending upon the nature of the business, its maturity and, above all, its profitability.

Here, to keep things simple, we’ll be concentrating on that sometimes challenging question of securing funding for a start-up.


Speak with any successful entrepreneur and almost all will tell you that finding their initial funding wasn’t easy.

We shouldn’t wonder why. Investors are understandably reluctant to put their money into companies with little or no track record. Some see the risks as being too high.

Banks in particular may have very stringent application processes which mean that as a start-up, funding may be especially difficult.

The fact that thousands of successful businesses DO secure such funding, should tell you that it is possible. A lot depends upon who you take advice and help from and how you go about it.

The first point to pick out here is focus:

  • you must show potential investors that you understand your business ideas inside-out, including things such as target markets and realistic projected sales volumes/profits;
  • it may be necessary to prove that you are risking some of your money, as well as asking others to risk theirs;
  • it’s absolutely imperative that you demonstrate a total familiarity with the basic metrics associated with running a business. You must be completely comfortable with concepts such as profit and loss, balance sheets, assets, forecasting and so on.

These things will show potential investors that you have the focus and knowledge to succeed.


In all probability, you’re going to need help in finding start-up (or existing) business finance.

That’s because although there are a number of potential sources of funding, some are likely to be far more receptive to your individual proposition and circumstances than others. You could waste a lot of time finding that out for yourself.

Another factor to consider is that some lenders or investors may only accept funding propositions from a few sources they know and trust. They adopt that policy as it means they only get to see credible and thought-through proposals because the intermediary will have vetted it on their behalf.

Fortunately, there are specialists out there who may be able to help you through the maze of trying to find business funding – whether for a start-up or existing business.  Contacting them for help and advice might save you time and money.


You might be looking at:

  • some business start-up funding might, even in today’s environment, be available from various government sources. Expect it to be limited and subject to fairly strict conditions;
  • asset re-financing. Many start-up businesses already have access to funds without even realising it. You might be able, for example, to borrow against equity you have in your house or other property;
  • business angels / private investors. These are usually wealthy individuals or sometimes groups of such. They’re often looking for slightly higher risk/return propositions and they can be useful in others ways too, as you try to grow your business (e.g. networking). They will though typically require you to operate through an intermediary, as outlined above. They will also usually ask for a percentage of your business overall and a degree of control as a result of that;
  • bank loans. Not as easy to obtain for start-ups as they once were. The banks may be able to assist but you’ll need a watertight case and they may be rather more risk-averse than business angels.

Which is for you?

It’s impossible to say without considering your exact start-up business position.

Remember though, that in the UK in 2016, on average 80 new businesses were started every hour! So, it can be done.

An initial discussion with an expert of the type mentioned above might be the most sensible starting place.