Funding options to get your business idea off the ground

If you’re reading this, the chances are you’re already a budding entrepreneur and it seems the UK is brimming with people just like you! A whopping 520,000 business were registered with Companies House in 2013, with the vast majority (95%) of those being small ventures launched by individuals with big ideas.

Unfortunately, one of the most common frustrations people face when setting up a new business is having a great start-up idea but no finances to turn it into reality. But here’s the thing… there are many, many funding options in place to help people just like you. So read on, and stop allowing a little thing like money from getting in the way of you achieving your dreams.

There are four main ways to obtain the funds you need to start your business

Government funding schemes

The government wants your business to succeed. More successful businesses mean more people in employment and a healthier economy. For this reason hundreds of different funding schemes including loans, grants and tax incentives have been launched to help fund the set-up and growth of new ventures. Each one of these schemes will have a different objective, perhaps to grow a specific industry or to create more job openings for young people or graduates. They also come in very different forms, from a traditional loan or grant, to finance for training new employees, increasing the visibility and appeal of your company and offering incentives for investors.

Transmit Startups is one exceptional option and is an official delivery partner for the Governments Start-Up Loans programme. They provide start-up loans that can help entrepreneurs get their businesses up and running as long as they are based in England or Scotland, aged 18 or over; and are either starting a brand new business or are within the first 12 months of trading. What we find unique about them is that they provide guidance and support in the pre-application phase (to help ensure your application has the best chance of getting approved). They also support the business through the early stages of a new venture with their team of experienced business mentors. Their breadth of experience spans every discipline from creative entrepreneurship to a myriad of other industries.

We explain this further in our Help CentreGovernment funding for small businesses

Borrowing money

Don’t just assume that you will be turned down for a bank loan, if you can prove there is a market for your idea a bank loan may offer you the cash you need. You’ll need to be able to prove you can make the repayments and give the bank a realistic cash flow forecast.  You may find it easier to secure the capital you need if you have something to secure it against, such as your house or car, however it is important you weigh up these risks carefully before agreeing to loan terms.

Check out Applying for Business Loans in our Help Centre for more support on this type of funding option.

Don’t rule out your nearest and dearest when it comes to financing your brilliant idea. Your friends and family want to see you succeed the most, so they may be willing to supply the money you need with a more informal repayment schedule than a bank.

Selling shares in return for investment

If your family can’t provide the cash you need, you will need to seek ‘venture capital’ investment from companies who believe your business will grow quickly. These are known as private equity companies and you will need to pitch your idea to them to get their backing. Alternatively, you could try seeking your own ‘business angel’. Business angels are wealthy individuals who invest in start-ups with real potential. Although tricky, this can be a great way to get both the investment and guidance you need to make your venture a success.

A good start when it comes to securing capital is to seek advice from individuals in your industry who have secured investment themselves. More advice on Raising Start-Up Capital in our Help Centre.

Because your outside investors are entitled to a share of the profit as well as a say in the running of the company, it is wise to get legal advice before you start selling shares in your business.


Finally, crowdfunding is a term used to describe multiple investors coming together to provide smaller contributions. Crowdfunding has been used to get a number of initiatives off the ground, including start-up ventures. In 2012 more than one million campaigns were launched globally and its popularity as a funding source is growing thanks to widely available platforms on the internet. So if you have a business or product that will appeal to the masses, online crowdfunding could be an avenue for exploration. We talked about reward-based crowdfunding and several success stories in past blogs.

So what will be expected from you when you seek financial support?

Many government-backed schemes work on a regional level so check out the finance finder tool to find which ones are in your area. The great thing is successful applicants are usually rewarded with free business advice and mentoring which can be invaluable in your first years of operation.

The key thing to bear in mind is that if you have a profitable business idea there WILL be a source of funding available to help you get started. So take your first step today and get valuable advice on funding options and more at The Formations Company’s Help Centre.