Can my start-up business get funding?

Financing options available for start-ups

Start-up business funding helps you to establish yourself in the market and implement your plans for early growth. General eligibility for commercial financing typically includes operating a financially stable business with a demonstrable and healthy trading history.

Although a start-up business is unable to offer this longer-term evidence, it doesn’t mean that you cannot get funding. In fact, a broad range of financing options is now available for start-up businesses and may provide an ideal solution that helps yours develop.

What types of funding can I get for my start-up?

Here are just some of the start-up funding options that may be available for your business:

Unsecured loans

If the business doesn’t own any assets of value you may be able to obtain funding via an unsecured loan. These can be quick to access and offer flexibility to new businesses, but because there’s no security offered, the lender may ask you to provide a personal guarantee to reduce their risk.

Secured loans for start-up businesses

Secured loans may offer you more favourable borrowing terms than unsecured loans if you have one or more business assets you can put forward as collateral. This is because the lender’s risk is vastly reduced when they can repossess the asset if your business defaults.

Invoice finance

Invoice finance, which comprises factoring and invoice discounting, can be a good option for start-up businesses as eligibility doesn’t rely on your credit rating. This type of funding is based on the strength of your sales ledger, so instead, lenders look at the creditworthiness of your customers to guide their lending decisions.

Equipment finance for start-ups

As a new business, purchasing equipment outright uses up capital that would be better kept in reserve. Different forms of equipment finance exist, however, which allow you to purchase new assets over a fixed period. These include hire purchase agreements whereby you can own the asset when repayments are complete. Equipment leasing is another flexible form of equipment finance for start-ups, and lease repayments are also tax deductible.

Business lines of credit

A business line of credit, sometimes known as a revolving credit facility, is funding that offers much flexibility to new businesses. In a similar manner to a bank overdraft, a limit is set by the financier on the amount of funding available, but the facility can be used and repaid flexibly by the business.

How to obtain funding for your start-up

UK Business Finance helps established and start-up businesses obtain the most appropriate types of funding for their needs. We’re highly experienced commercial finance brokers and can establish the best solutions for your start-up, whichever sector you’re in.

We understand the eligibility criteria of all lenders in the UK and by taking a whole-of-market approach we ensure you apply only for the most suitable funding for your needs. There’s no charge to you for our services, so please contact one of the team to find out more.