1. Government Start Up Loans
The UK government offers Start Up Loans to new entrepreneurs:
- Borrow up to £25,000
- Fixed 6% interest rate
- Free business mentoring for 12 months
It’s ideal for first-time founders or businesses less than 3 years old.
2. Small Business Grants
Unlike loans, grants are non-repayable. You can apply for:
- Local authority startup grants
- Innovate UK funding for R&D
- The Prince’s Trust grants (18–30 years old)
- Sector-specific or regional schemes
Check eligibility and apply early—grants are competitive.
3. Business Bank Loans
Traditional banks still offer competitive funding:
- Secured or unsecured options
- Longer repayment terms
- Lower interest rates for established businesses
You’ll need a solid business plan and good credit history.
4. Alternative Business Loans
Use non-bank lenders or platforms:
- Merchant cash advances
- Peer-to-peer lending (e.g., Funding Circle)
- Revenue-based financing
These offer faster access and flexible requirements, especially for poor-credit businesses.
5. Equity Investment
Raise funds by offering shares in your company:
- Angel investors
- Venture capital (VC) firms
- Equity crowdfunding (e.g., Seedrs, Crowdcube)
Investors gain ownership, so be prepared to share decision-making.
6. Crowdfunding
Public support for business ideas via online platforms:
- Rewards-based (e.g., Kickstarter, Indiegogo)
- Equity-based
- Donations or pre-orders
Good for product-based startups or businesses with a strong story.
7. Business Credit Cards
Useful for short-term funding and building business credit:
- Quick approval
- Access to revolving credit
- Cashback or rewards
Keep usage under control to avoid high interest and damage to your credit score.
8. Invoice and Asset Finance
Turn invoices or equipment into cash:
- Invoice financing for B2B transactions
- Asset finance to fund new machinery or vehicles
Helpful for maintaining cash flow without adding debt.
9. Friends and Family Funding
Many early-stage businesses get their first capital from personal networks:
- Informal, flexible terms
- Can boost credibility with later investors
Be sure to document terms to avoid misunderstandings.
10. Business Competitions and Accelerators
Win funding and support through:
- Pitch competitions
- Startup accelerators and incubators
- University innovation hubs
You may receive capital, mentoring, and access to investors.
Frequently Asked Questions
1. What is the easiest way to get business funding?
Government Start Up Loans and grants are among the easiest for new businesses with clear plans.
2. Can I get business funding with poor credit?
Yes. Consider alternative lenders, merchant advances, or microloans. A guarantor can also help.
3. How much funding can I get as a new business?
Startups may receive £1,000 to £25,000 from most government or microloan schemes. Equity and crowdfunding can raise more.
4. Do I need a business plan to apply for funding?
Yes. A strong plan shows lenders and investors your business is viable and sustainable.
5. Is business funding taxable?
Grants may be taxable. Loans and investment funds are generally not taxable, but always check with an accountant.
6. How long does it take to get business funding?
Bank loans can take weeks. Alternative lenders may fund within 1–3 days. Government grants vary based on the scheme.
Conclusion
Getting business funding in 2025 is more accessible than ever—whether through government support, private investment, or alternative finance. The key is preparation: craft a clear business plan, explore all options, and choose the funding that aligns with your goals. Start now and give your business the financial foundation it needs to thrive.