{"id":9464,"date":"2021-04-26T10:00:47","date_gmt":"2021-04-26T09:00:47","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=9464"},"modified":"2026-01-29T09:45:57","modified_gmt":"2026-01-29T09:45:57","slug":"get-funding-start-business","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/get-funding-start-business\/","title":{"rendered":"How to get funding to start a business"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow to get funding to start a business\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2021-04-26T10:00:47+01:00\">26 April, 2021<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How to get funding to start a business\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-gb\/blog\/get-funding-start-business\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/author\/staceymcintosh\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2018\/11\/Stacey-McIntosh-350-1.jpg\" class=\"entry-author__image\" alt=\"\" \/>\t\t\t\t<span class=\"entry-author__name\">Stacey McIntosh<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>From The Apprentice to Dragons\u2019 Den, we&#8217;ve all seen TV shows where would-be entrepreneurs pitch for funding to start a small business (or scale a company later down the line).<\/p>\n\n\n\n<p>While these shows make for great entertainment, they can make the idea of <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/sound-advice-win-investment-women\/\">getting investment<\/a> seem rather scary.<\/p>\n\n\n\n<p>In the real world, there are several ways to get funding to start a business in the UK \u2013 and you won&#8217;t normally get shouted at by leaders of industry in the process.<\/p>\n\n\n\n<p>Funding is a real concern for many people who are interested in entrepreneurship.<\/p>\n\n\n\n<p>In a recent Sage survey, more than half of respondents said financial constraints were the main barrier to them launching their own company.<\/p>\n\n\n\n<p>The good news is there\u2019s plenty of financial help available for starting a business.<\/p>\n\n\n\n<p>Here\u2019s what you need to know about startup funding:<\/p>\n\n\n\n<p><a href=\"#why-anchor-link\">Why get financing to start a business?<\/a><\/p>\n\n\n\n<p><a href=\"#how-anchor-link\">How to get money to start a business<\/a><\/p>\n\n\n\n<p><a href=\"#what-anchor-link\">What to provide when applying for funding<\/a><\/p>\n\n\n\n<p><a href=\"#more-anchor-link\">More than just finances<\/a><\/p>\n\n\n\n<p><a class=\"button button--primary\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/business-readiness-assessment\/\">Dreaming of bossing your own business? Take our quiz to see how ready you are to take the plunge<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"why-anchor-link\">Why get financing to start a business?<\/h2>\n\n\n\n<p>There are several reasons that you might want to seek out financing to start a business:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Equipment costs \u2013<\/strong> such as computers, vehicles, tools or machinery<\/li>\n\n\n\n<li><strong>Premises costs \u2013<\/strong> renting an office, workshop or factory space<\/li>\n\n\n\n<li><strong>Staff \u2013<\/strong> if your business needs staff so it can run effectively, you might need help to pay their salaries<\/li>\n<\/ul>\n\n\n\n<p>It\u2019s always worth asking if you really need external financing.<\/p>\n\n\n\n<p>Research shows that <a href=\"https:\/\/www.thecompanywarehouse.co.uk\/startup-market-analysis\/startup-funding-report\">a quarter of all businesses<\/a> in the UK launch with less than \u00a31,000 and more than 80% of UK startups are entirely self-funded.<\/p>\n\n\n\n<p>So, it might be easier than you think to <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/start-a-business-no-money\/\">start a business without borrowing money<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-anchor-link\">How to get money to start a business<\/h2>\n\n\n\n<p>Of course, in many industries, it just wouldn\u2019t be possible to launch without funding. This is especially true in sectors where you need to invest before you can start making a return.<\/p>\n\n\n\n<p>Technology companies, manufacturing firms and retail businesses almost always need external investment to get going.<\/p>\n\n\n\n<p>If you don&#8217;t have your own personal savings to invest in financing a small business startup, the following methods could help:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Family and friends<\/h3>\n\n\n\n<p>Getting a loan from friends or family is one of the oldest ways of financing a startup business.<\/p>\n\n\n\n<p>Your relatives or acquaintances may either lend you the money until you start making a profit, or they might ask for a share in your company.<\/p>\n\n\n\n<p>The benefit of turning to friends and family is that they may lend you the money for nothing (or at very reasonable rates of interest).<\/p>\n\n\n\n<p>But, of course, if things go wrong with your business and you can\u2019t repay the loan, this could affect your personal relationships.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Banks<\/h3>\n\n\n\n<p>Banks are another traditional way of seeking funding to start a small business. You approach the bank manager and ask for a loan, then pay interest on it.<\/p>\n\n\n\n<p>However, since the 2008 financial crisis, startups and small and medium-sized enterprises (SMEs) have <a href=\"https:\/\/assets.publishing.service.gov.uk\/government\/uploads\/system\/uploads\/attachment_data\/file\/34739\/12-949-impact-financial-crisis-on-bank-lending-to-smes.pdf\">found it harder<\/a> to access credit from banks.<\/p>\n\n\n\n<p>Unless you have a large amount of collateral to back the loan up (such as property), it may be difficult to get money in this way.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">UK government startup loans<\/h3>\n\n\n\n<p>The UK government&#8217;s <a href=\"https:\/\/www.gov.uk\/apply-start-up-loan\">Start Up Loan scheme<\/a> can lend between \u00a3500 and \u00a325,000 to small businesses with an annual interest rate of 6%. The loans must be repaid within five years.<\/p>\n\n\n\n<p>These government-backed loans do come with relatively strict eligibility criteria, though.<\/p>\n\n\n\n<p>You must be 18 or over, be a UK resident and provide evidence that you couldn&#8217;t raise funding through other avenues.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Grants<\/h3>\n\n\n\n<p>Grants are a way of getting free money to start a small business.<\/p>\n\n\n\n<p>These sums are made available through a variety of schemes from <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/government-grants-for-small-businesses\/\">central government<\/a>, regional governments, universities, and major institutions (such as museums, professional membership bodies or cultural funds).<\/p>\n\n\n\n<p>Business grants are normally awarded to startups on a very specific basis, normally to solve certain problems.<\/p>\n\n\n\n<p>For example, if a local council was looking to regenerate its manufacturing sector, it might provide grants to manufacturing companies to encourage more employment in their town.<\/p>\n\n\n\n<p>Grants often come with strings attached and require a long application process. But if you can prove that you meet the requirements, this can be a great way of accessing capital.<\/p>\n\n\n\n<p>You can find listings of new grants at the following websites:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.j4bgrants.co.uk\/\">J4bgrants<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.grantfinder.co.uk\/\">GrantFinder<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.grantsonline.org.uk\/\">Grants Online<\/a><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Crowdfunding<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-gb\/blog\/crowdfunding-tips\/\">Crowdfunding<\/a> is a relatively new way to find funding to start a business.<\/p>\n\n\n\n<p>There are various crowdfunding websites where you create a page describing what your business will do and how much money you are looking for. People on the website may then decide to provide you with small sums of money.<\/p>\n\n\n\n<p>There are a few different kinds of crowdfunding:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Donation: <\/strong>People give you money because they like the idea behind your business with no expectation of anything in return.<\/li>\n\n\n\n<li><strong>Equity:<\/strong> Investors will ask for a share of your business in return for their investment. They effectively become your shareholders and you\u2019ll have to pay out dividends to them in future if the business is a success.<\/li>\n\n\n\n<li><strong>Debt:<\/strong> With this kind of crowdfunding, people who lend you money will expect it back with interest in an agreed time frame.<\/li>\n<\/ul>\n\n\n\n<p>Crowdfunding is especially popular for <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/rockit-grants-crowdfunding\/\">unusual or interesting startups<\/a> that might struggle to access funding from other sources.<\/p>\n\n\n\n<p>Your ability to raise funds relies on how well you can pitch and promote your idea on these websites.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.fundingcircle.com\/uk\/introducers\/\">FundingCircle<\/a> and <a href=\"https:\/\/www.kickstarter.com\/\">Kickstarter<\/a> are some of the most popular sites for crowdfunding to start a business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Investment<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-gb\/blog\/dealing-with-investors\/\">Getting investors on board<\/a> with your idea is another potential way of finding capital to start a business.<\/p>\n\n\n\n<p>The investor will normally provide a large amount of money, which you can use to grow the company. Investors will expect equity in the business and may insist on being involved in decision making.<\/p>\n\n\n\n<p>There are a couple of kinds of investment:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Angel investment:<\/strong> A wealthy individual provides equity finance to your business. Angel investors often get involved right from the beginning of the company\u2019s journey. The\u00a0<a href=\"https:\/\/www.ukbaa.org.uk\/\">UK Business Angels Association<\/a> is a good place to start.<\/li>\n\n\n\n<li><strong>Venture capital:<\/strong> There are various large venture capital funds. They typically invest in startups that have already got a couple of years under their belt, but they may occasionally invest in promising new businesses. Try the <a href=\"https:\/\/www.bvca.co.uk\/\">British Private Equity &amp; Venture Capital Association<\/a> to begin.<\/li>\n<\/ul>\n\n\n\n<p>It can be challenging to find an investor who will provide the funds that will help you start a business and you may have to hand over a certain amount of control to them.<\/p>\n\n\n\n<p>That said, they\u2019re normally very experienced running companies and can provide advice and guidance.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"#gate-8bedd1ad-a10c-406c-a489-1e41f370e38b\">Download your free guide, How to pitch for investment as a small business<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-anchor-link\">What to provide when applying for funding<\/h2>\n\n\n\n<p>If you\u2019ve found a potential source of funding for your business, make sure you read the requirements of the lender or investor in detail. They normally ask for very specific information on your application.<\/p>\n\n\n\n<p>When you\u2019re applying to finance a small business startup, you will, at a minimum, need to provide:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A business plan, which explains what the business is and how you expect to grow it<\/li>\n\n\n\n<li>Financial projections, which show (realistically) how you will generate income and reach break-even<\/li>\n\n\n\n<li>Information about your professional and educational background<\/li>\n\n\n\n<li>Details about your personal finances including your savings, debts and if you\u2019ve ever filed for bankruptcy.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"more-anchor-link\">More than just finances<\/h2>\n\n\n\n<p>Whether or not you decide to get funding to start a business, being an entrepreneur requires more than just startup capital.<\/p>\n\n\n\n<p>You\u2019ll also need to consider the administrative side of running a company and think about your mindset too.<\/p>\n\n\n\n<p>And that&#8217;s where our business readiness quiz helps. It takes just a couple of minutes to complete and will give you personalised guidance about what you need to do to get ready to launch and boss your business.<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Are you ready to be your own boss?<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Dreaming of managing your own business? Take our quiz to see how ready you are to take the plunge.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-gb\/blog\/business-readiness-assessment\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-8930\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>Take the quiz<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"780\" height=\"500\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2021\/03\/CTA-2.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2021\/03\/CTA-2.jpg 780w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-b1a63862-3fa0-4a5e-bb67-c76b88bbc6b8\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1073797282-1-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1073797282-1-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>From The Apprentice to Dragons\u2019 Den, we&#8217;ve all seen TV shows where would-be entrepreneurs pitch for funding to start a small business (or scale a company later down the line). While these shows make for great entertainment, they can make the idea of getting investment seem rather scary. In the real world, there are several [&hellip;]<\/p>\n","protected":false},"author":346,"featured_media":9422,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"footnotes":""},"categories":[6],"tags":[135,124,12],"business_type":[4],"lilypad":[],"context":[],"industry":[],"persona":[73,75],"imagine_tag":[109],"coauthors":[353],"class_list":["post-9464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-business-finances","tag-business-support","tag-start-business","business_type-small-business"],"sage_meta":{"region":"en-gb","author_name":"Stacey McIntosh","featured_image":"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2021\/04\/DSC0267_All-Uses.jpg","imagine_tags":{"109":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice UK","distributor_original_site_url":"https:\/\/www.sage.com\/en-gb\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/9464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/users\/346"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/comments?post=9464"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/9464\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media\/9422"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media?parent=9464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/categories?post=9464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/tags?post=9464"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/business_type?post=9464"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/lilypad?post=9464"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/context?post=9464"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/industry?post=9464"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/persona?post=9464"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/imagine_tag?post=9464"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/coauthors?post=9464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}