Funding is the act of providing resources to finance a need, programme, or project. There’s lots of different funding options.
Having enough cash is a key aspect of your business’s financial health. Not having enough working capital can have a serious impact, for example, you might need funding to allow you to complete your business plans.
And because there are so many funding options out there, it’s often hard to know which one is best for your business at the time. If you’ve already watched the videos on our access to funding page then you’ll know a bit more about what’s available. There’s also a quick recap below.
Generally low-interest government-backed personal loans or grants available to individuals looking to start or grow a new business in the UK.
For information on grant funding visit Government Grant Service or Swoop to find grants that may be appropriate for your business.
Borrowing from financial providers like banks or loan companies offering a range of borrowing services including:
Accelerators can offer both equity and non-equity funding, usually alongside a programme of support.
The use of small amounts of capital from a number of individuals to finance a new business venture, including:
Investment for an equity stake in the business including:
Floating your business on the stock market, and making shares available to buy in order to raise money.
This diagram shows the different types of funding available. It also gives you an idea which ones could be the most relevant at each stage of your business.
Looking for and finding funding isn’t easy. It can be a frustrating and time consuming way to grow your business. So, be prepared and do your research.
Think about the options that are:
There are 10 key elements to get down for your funding one-pager, which are similar to the 60-second pitch idea that you might have already looked at. If you haven’t had a chance, don’t worry, there’s everything you need to know in the 60-second pitch article.
In the meantime, carry on thinking of your answers to each of these sections. Pull your thoughts together using these headings and you’ll have the basis of your funding one pager.
1. Business model
What’s different about yours? How do you distribute, who are your key partners, how do you make money?
2. Business summary and vision
A brief intro to your business and your overall vision for the long term.
3. Competitive advantage
What’s yours? What’s the innovation that makes you stand out?
4. Contact details
Don’t forget to include them!
5. Customer problem and your solution
Introduce the problem or painpoint. Explain how your solution addresses the painpoint for the customer.
6. Financial summary table
What are your projections for the next 3-5 years in terms of turnover, gross and net profit?
7. Management team
Who’s in your team – and what’s their experience? Do you have mentors, non-exec directors or advisors?
8. Target market
What’s your knowledge of it? Do you know the total addressable market and the size of the opportunity?
9. Traction
What have you done to date? What’s your proof of concept, and where are you with customers, sales and investment?
10. Your ask (mentor/funding)
What’s the amount of investment you’re looking for, and what will you use it for? What’s your exit strategy and the ROI?
Securing funding can be tough, so plan ahead if you can
Explore all the options available to you
Speak to peers, your bank manager and investors
Be realistic about how much you need and why
Pitch often and be resilient to knock-backs
Create clear and concise documentation that stands out from the crowd
Our jargon buster could help. Doing, growing and selling a business is packed with words, acronyms and terms that you may not have heard before. Our jargon buster explains the most common so you can sort the equity from the liquidity, and keep an eye on the unicorns.
An essential guide from Start Up Donut to make sure you’re getting the best possible financial base for your business.
Discover more about the main stages of investment and what that means for funding.
Make sure you’re ready for investment by checking out these questions from All Business.
Law firm Pinsent Masons explain the key roles in a business and their responsibilities.
It’s important to remember that most businesses go through the processes of looking for funding. So no matter how hard it seems at the time you’re not on your own, and there’s lots of support available.
You could:
For more insights on funding and managing your business finances check out this article Understanding your finances.
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