Funding Options
Through award-winning technology, Funding Options searches the market to find a good funding option for your business. It’s quick, easy to use and their team is on hand if you need to call.
Growing and funding a business using finance
From finding out what funding options are available, to how to plan a winning pitch for investors – here’s how to use business financing to grow and thrive.
Running a business can be exciting, especially when new growth opportunities come along. But change can bring with it the difficult decision of which finance options will be right for your next stage of development.
External funding could provide a solution by clearing the path to growth and reigniting the potential within your business.
So how do you know where to start when there are so many potential options? That’s where we can help.
Select the tabs below to learn more about each financing option and see our tips on how to prepare a strong business financing case. You’ll also find resources on how we can help accelerate the growth of your business.
There are many sources of finance that could be available to your business. Here are some of the main options to consider – from help with day-to-day cash flow, to investing in a larger purchase, or fuelling exciting growth plans.
Like many businesses, the first place to go to for financing options is your bank. If you bank with us, we can offer expert guidance tailored to your needs thanks to the knowledge we build up about you and your business over time. This helps us to quickly identify the most appropriate sources of funding and offer a range of options available. These include:
If you're looking to buy or remortgage business premises, there are several funding options that could be available to you, including buy-to-let loans for business and commercial mortgages. You might also consider talking to a Commercial Finance Broker or one of our Business Managers – they will provide guidance, discuss the options available to you and deal directly with the lender on your behalf.
The UK government could also help your business to secure necessary funding through a variety of measures, including a business grant. They currently provide a range of grants for small businesses, which are managed by several different bodies. Most are linked to specific activities, such as research and development. While the grants don't have to be repaid, you will have to meet strict qualification criteria. Discover the support that could be available for your business.
One of the main benefits could be flexibility over how and when you pay the money back. It could also give you the opportunity to get finance on top of what you can borrow more formally elsewhere (as long as you’re able to repay all the money you’ve borrowed).
But you – and your investors – should understand the commitments being made by all parties. Any misunderstandings could risk damaging your relationship in the future, so it’s advisable to draw up a formal contract with help from an independent solicitor.
Offering a share of your company (or equity) to a third party as an investment opportunity, could be an effective way to raise cash. Compared to a business loan from a bank, you might not have to make any repayments on the money invested.
However, Angel Investors (wealthy individuals who back businesses with their own money) and Venture Capitalists can ask for a larger share of your company in return for their investment.
1. Know what type of funding you want
Doing your research first can really help you get ready to apply for business funding. Whether you’re looking for a business loan for startups or wish to apply for a government grant – weighing up the pros and cons of all the options in advance can be crucial to a successful outcome.
How ready you appear to others when applying for finance, will also improve your success rate at securing the funding. Being clear about your business funding needs and how you want them to be met, can help to give people more confidence in lending to you. At the very least, it can speed up the process and help prevent wasted time and energy on things that won’t work for your business.
This consideration stage should also focus on your own requirements too, both now and in the future. For example, borrowing from a family member may seem like an easy source of funding initially, and for many businesses it might be the most suitable option. Yet it won’t help you to build up the kind of credit rating that could help to unlock further business finance for growth opportunities when your business needs it.
2. Have a good credit rating
Being able to show you’re worthy of credit could, in most cases, be a key factor in securing funding for your business. But how do you make sure yours is the best it can be before approaching potential lenders? Following these tips could help boost your score:
3. Know how to approach potential investors
Getting this right can help prevent wasted time and lost opportunities. It’s essential that you can present your business as a viable investment opportunity.
The best time to approach lenders is as soon as you’ve started to think about your growth plans. Not only can this help to shape your strategy more fully, but lenders may also feel more confident if they’ve been involved in discussions from an early stage.
You should also be specific about why the money is needed, how you’ll pay your investors back and how long it will take you to do so. Be prepared to answer in-depth questions about your business – potential lenders will want to feel comfortable that your ambitions are built on firm foundations.
Different lenders will have varying criteria for business funding, so research this in advance and make sure you meet the requirements.
Regardless of who you’re planning to borrow from and the type of lending you’re looking for, it’s essential that you’re clear about your own side of the deal – whether that’s the assets you’re prepared to offer up as security, or how much of an equity stake you’d be comfortable giving up.
There’s no set method that will guarantee success when pitching for business finance, but you can give yourself an advantage by presenting your case in the best possible way. Research tips and best practices when applying for funding to help you get ready and to know what to expect when presenting your funding pitch.
Many lenders, including us, will often use the CAMPARI framework to assess your application. If you can meet the criteria in this model in your pitch for funding, you’ll be more likely to get a positive outcome. Don’t forget to add in anything that makes your business stand out, for example if you’ve won awards or been particularly successful in a certain area. Think about whether there’s anything relevant that the bank might not ask about but that could put your business in a stronger position.
C – Character: This is your chance to shine and in business financing terms that means convincing investors that you – and your business – have the professionalism to look after their money and give them a return. You can incorporate many things, from the confidence you have in your idea, to your business’s record of making loan repayments in time. Having a strong brand reputation also helps a lot.
A – Ability: You need to show clearly that you and the people in your business have the knowledge and ability to generate growth from any funding that’s provided. Your track record as a business is likely to be considered, as is the quality of its products or services and the strengths of the management team. Your staff could also play an important role – having good people in key positions helps to give lenders confidence, so consider taking on outside expertise if you don’t already have the right people within your business.
M – Means: Is your business equipped to deliver on your growth ambitions? This is where the strength of your business plan comes into action. You should try to show where you have, or will have, a competitive advantage in the market. You should also prepare detailed financial reports with best- and worst-case scenarios, future growth projections, previous performance records and in-depth company expenditure.
P – Purpose: Lenders will want to know what the money will be used for and how it will be used to generate a profit or improve the business’s financial situation. This part of the framework is also where prospective investors will consider whether the borrowing is in the best interests of the business, if there’s a good enough reason for requesting it and if it fits in with their own lending guidelines.
A – Amount: How much are you asking for, and is it the right amount for your stated requirements? Potential investors will want to see how you’ve decided on the level of funding you’re asking for, how it aligns with your financial projections and what the business’s own contributions to the project may be. It’s worth taking time to decide on the right amount. While it’s a good idea to be cautious, asking for too little funding could be counter-productive if it means your plans are judged as being less likely to succeed.
R – Repayment: You’ll need to be able to show evidence that you’ll be able to afford any repayments or provide solid projections that indicate how you’ll be able to repay your investors over time. Lenders will be looking for details on the source of the repayment money. They’ll be considering areas such as the health of your cash flow, your profit margins, and if the repayment period is acceptable.
I – Insurance: In many cases, it’s important for you to be able to show that you have a back-up plan in place in case things go wrong. Do you have another source of repayment? Have you taken out any insurance that could allow you to repay the financing if you fall short of your targets? If you’re securing the finance on an asset, make sure you have an up-to-date valuation to show.
Small to medium enterprises (SMEs) often prefer to grow more slowly than borrow money in order to grow faster. While the financial, and other, obligations of business funding need to be considered carefully, so should the opportunities it can provide.
Successful borrowing can often be positive for the long-term health of a business, helping it to develop and ultimately become much stronger.
And for many businesses with ambitious growth plans it’s likely that, at some stage, they will consider taking on financing to help achieve their aims. Find out how to accelerate your business growth ambitions by partnering with our business financing.
It’s certainly the case for glass artist Ray Youngs, who found that borrowing money from us gave him much more than just the financing he needed to move his business, Skullpture Glass, to larger premises.
I didn’t realise that kind of help was out there, and certainly not from a bank.
Owner, Skullpture Glass
Working closely with us also gave him the confidence and contacts to put additional growth plans in action, including exploring further expansion through new international opportunities.
To find out more about Ray’s story, watch our video.
Compare our business borrowing options to other lenders. Find out more about the UK government’s Bank Referral Scheme [PDF, 1.4MB], including information about eligibility.
Through award-winning technology, Funding Options searches the market to find a good funding option for your business. It’s quick, easy to use and their team is on hand if you need to call.
A service that offers a free and easy way to find different funding options, focusing on making things more simple for busy business owners.
Through search functionality, this site shows you competing offers from lenders with the best terms. You’ll see quotes from up to 45 lenders in a simple format, so you can easily compare and choose the best option for your business.
A service that matches you to over 100 providers by assessing your needs and showing you a broad range of funding options available across the UK and Ireland.
You know your business, we know how to help
We've got the borrowing options you need to succeed, whether you’re just starting out or planning to expand.
Adapting to change
We’ve put together a series of articles and guides to support you and your business, and help you feel more confident about the future.