How much could your business save?Find out now!
Or, you can call us on:0800 411 8830

Finding funding for your small start-up business


A capital injection can be vital in helping small start-up businesses grow quickly. But finding funding can be a challenge – it pays to be prepared.

Fresh capital could help you buy more stock, invest in equipment, open a new office or branch, or take on more staff. But borrowing money or seeking equity investment tends to be easier for established firms than for newer businesses.

“Start-ups are still very difficult to get funding for,” says Rob Donaldson, head of corporate finance at accountant Baker Tilly. “Bank finance for new firms is virtually impossible and equity funding is very difficult because the risks are very high. Most institutions much prefer lending to businesses that have got themselves off the ground.”

When to seek finance

The best time to look for new money is when your business has started generating revenues and profits.

“Even if you have been established for a while, it is hard to get funding if you are still consuming cash or making a loss,” Donaldson adds. “Ironically, the less you need money, the more you can raise.”

Potential backers will be more interested if you need the finance to help you meet demand.

“Investors will always prefer to fund a business that wants to take advantage of opportunities to grow: if you have people clamouring for your product and just need help delivering it, that’s a less risky proposition,” Donaldson says. “But if you need money to go out and create a market, for example to spend on marketing and attracting customers, the perception is that’s slightly riskier.”

Being prepared

The key to successfully raising funds is convincing potential backers that you offer a worthwhile investment or lending opportunity.

“You can almost never be over-prepared,” Donaldson says. “Very often fundraising fails because applicants aren’t especially well prepared for the questions that are going to be thrown at them.”

Donaldson says that it’s not enough for businesses to present a spreadsheet or two and expect backers to be impressed. “It is important to help lenders or investors understand how you are going to deliver the numbers you are forecasting.”

“You need a plan that describes what your business does, what opportunities are available and how you are going to capitalise on those opportunities.”

Find out more about alternative funding options with our guide.

Related Articles

energy news 21/01/2017

Energy News – 21/01/2017

The week of Donald Trump’s inauguration has seen shaky energy markets, a landmark Brexit speech by Theresa M...

Read More
how business leaders avoid burnout

How business leaders avoid burnout

When you’re a small business owner the buck stops with you, which can make it incredibly difficult to sw...

Read More
how to make 2017 your best year ever

How to make 2017 your best year yet

Whether you heaved a sigh of relief when 2016 ended, or said goodbye to the year with sadness, we have some ti...

Read More
Excellent, 9.6 / 10

Thanks Mark...

"Mark was very helpful and had all the answers to the questions I had - would go back to him time and time. Thanks Sir"

This review was posted by Wayne Nugent - Mailing Guy on the 20th of January 2017

Switch Business Electricity Contract

"Very good & efficient service - good range of prices offered from variety of suppliers"

This review was posted by SALLY DOLMAN on the 20th of January 2017

Cheerful, helpful service.

"Aaron Gallagher was my contact at SwitchMyBusiness.com. Aaron was cheerful and helpful he made switching our electricity supply easy and painless giving an understandable explanation each step of the way. I would quite happily recommend this company and Aaron Gallagher to anyone given the task of arranging a new energy contract."

This review was posted by Pam Johnson on the 19th of January 2017

Kyle Wright - Excellent Service

"Dealt with the above on two occasions now and has made the process of switching energy suppliers very easy. Very Polite and helpful person, will defiantly want to deal with again."

This review was posted by Skyline32 on the 19th of January 2017

Made this a very simple transaction!

"Aaron was polite, friendly and extremely helpful, making this potential chore a very easy transaction. He explained everything thoroughly and answered all my questions and I feel very confident that the whole transition will go very smoothly and I am aware of what to expect as the process moves forward. Thanks Aaron!"

This review was posted by Lesley Clayton on the 18th of January 2017