Small business funding from Barclays
How can you get the business funding you need?
Whether you need finance to start a new business or grow your existing one, there are a number of funding sources you could choose from. Here are some of the most popular small business funding options.
First things first: work out what you'll need
Before you assess your small business funding options, you should make a list of all your anticipated costs - including items such as stock, staff, rent, computers and phones, VAT, taxes and legal fees.
This will determine how much money you'll need.
If you decide to take out a loan to cover all or part of the funding you need, you should also develop a repayment plan, so that you don't borrow more than you can afford.
Your business funding options
Your personal funds
- Investing in your own business can be a low-cost option - after all, you don’t have to pay interest on your own money. But make sure you’re not putting your own way of life at risk, and that you keep enough in reserve to keep you afloat in challenging times.
Borrowing from friends and family
- This can also be a low-cost source of funds. If you go down this route, make sure that your family and friends are fully aware of the risks, so that you don’t risk jeopardising your relationship.
- These are the profits you keep in your business and are the main source of finance for companies that are already up and running. Since no external investment is needed, they’re usually the cheapest way to fund your growth plans.
Grants and awards
- Grants tend to be one-off payments to fund specific costs, while awards recognise achievement. Both are usually more available to businesses that are just starting out, or that are based in areas that need regenerating economically. You can find out more about grants and awards from organisations like enterprise agencies, regional development agencies and Business Link.
- Overdrafts are a form of short-term financing that can be useful if you need to cover short-term fluctuations in your cash flow. Find out more about a Business overdraft
- Business loans are generally given to help you buy fixed assets – such as machinery or office equipment – where the amount you need isn’t going to change over time. Find out more about Business loans up to £25,000
Hire purchase or lease
- These arrangements allow you to ‘rent’ an expensive asset, rather than purchase it outright. If you hire purchase, you’ll own the asset at the end of the agreement, while a leased item must be returned.
Bring investors on board
To do this successfully, you’ll need to capture the interest of potential investors with a well-prepared business plan that shows:
- Your vision for the business
- Your goals
- Financial projections
- How much finance you need
- What you’ll spend the money on
- How you’ll repay them
- The profit they can expect to see
Make sure you provide potential investors with good credit references. And if you can, make an investment yourself – it shows you’re committed to the business.
If you're starting a new business, our free guide 1 to raising finance to start a new business contains more detailed information about getting the funds you need.
Looking to finance your business? Here’s some information that could help.