Finance Types

Start-up Finance

Start-up Finance

There is a wide variety of external finance and other support available to new and start-up businesses, with options designed for sole traders and freelancers, microenterprises, SMEs, social enterprises and larger businesses. The UK also has a thriving network of business incubation and acceleration programmes.

The UK’s high-street, traditional and ‘challenger’ banks offer products designed for new businesses. Many universities, local enterprise partnerships, city regions and councils have regional or local programmes designed to support start-ups (and growing businesses).

The Government-backed Start Up Loan programme offers unsecured business loans of up to £25,000 to individuals looking to start or grow a business in the UK. In addition to the finance, successful applicants receive 12 months of free mentoring. The interest rate is competitive and you can repay over a one to five-year term. Visit Start Up Loans for more information.

Many banks and Responsible Finance providers are also partners in the Start Up Loans programme.

Before approaching a lender you should consider the following questions:

  • What sort of business are you planning to run and in what sector?
  • What experience and expertise will you bring to the business?
  • How will you secure customers?
  • What do you need finance for and how much do you think you will you need?
  • How long will you need to repay the finance?
  • Are you, your friends or your family putting money into the business?

Your business plan should cover answers to these questions. Click here for a government guide on how to write a business plan.

As you begin to approach potential lenders, it is important to consider what you might be asked and research what you will need. It is often helpful to talk through your plans. If you know you want to apply for funding but are unsure about the next steps, there are many professional and business organisations which can outline and discuss your options. You could also consider approaching a mentor via the Mentorsme network.