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Small Business Loans and Investment Options for Start Ups

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Over half a million new businesses were registered last year and that figure will only increase this year and the next. Getting your start up finance right can help you succeed quicker, but where should you be looking for small business loans?


If you have the funds to go it alone, it can be the best way for your start-up to get off the ground without any other input or reliance on others for funding or relinquishing any equity in your business. While it means you control everything, ‘bootstrapping’ can also lead to slower growth and missed opportunities.

Government loans

The government has a start up loans scheme which offers loans of up to £25,000 per partner in the business (up to a maximum of 4) to help you get your business off the ground. Part of its package includes a fixed 6% interest rate, loan rates of between 1-5 years, no set up fees and free mentoring.

Government grants

If you can get a government-funded grant it can be of great benefit as the only downside is that they are often small and rely on countless forms being filled out. Regardless, it is free money! You will find plenty of competition for these kinds of grants and sometimes you will have to match them with your own investment too.


Crowdfunding raised over $34 billion in 2015, double its 2014 figures and 2016 looks like surpassing that figure again. With crowdfunding, you can open up your business idea to a much bigger (and hopefully more appreciative) audience. Some of the more well-known crowdfunding platforms include Crowdcube, Funding Circle, Seedrs, Rate Setter, Thin Cats and of course Kickstarter.

Peer-to-peer lending

It sounds like an ideal match, with businesses looking for investment and those with money looking to invest. Because the lending criteria is only as stringent as the individual (or group of individuals) lending, it can be easier to find better rates for you and better rates of return for investors.  

Business loans from the bank

The normal strategy for new startups is to visit your bank, even though nearly half of all business loans are denied. However, banks have a very pragmatic approach to lending. Their caution will inevitably lead to lengthy applications and may require you to put up security against your borrowing. If your business is grounded on solid and reliable projections then a business loan from a bank can be the way to go, especially as it won’t mean letting any control of the business out of your hands.

Borrowing from family

It’s become all too familiar when purchasing your first house, the bank of mum and dad is almost expected to be there to help you get over the starting line, but it’s an increasingly similar story in business too. It could be just a few pounds to set up a home office or it could be a significant investment, treated in the same way any severe other investor would.

When borrowing from your family or friends it is essential to ensure that both parties know what their legal and repayment responsibilities are. It should be approached as with any other start-up loan with a business plan, projections and the term the loan will take.

Venture capital

This allows private investors, banks and pensions to pool their money into a fast-growing business. They will usually want an equity stake in the business and the sums involved are often very high. Many firms looking to secure venture capital are tech firms where a large amount of money is required as is a need to get products or services to the market as soon as possible.

Whichever type of funding you are going for it pays to be prepared. That means ensuring you have your business plan and your forward projections laid out clearly including all your strategy partners, product, where you will find your customers and when you expect to be able to complete your repayments.

We really understand the challenges you are facing and we’ll work hard to find the best finance to overcome these hurdles. To learn more about our start-up finance packages, even if you have already been turned down previously by a bank, call us today on 03330 069141 or request a call back for a one-to-one business finance consultation from one of our experts.


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Bobby Turner

Marketing, SEO & Stats Lead Content Expert. 12 years working with B2B, e-commerce businesses. Bobby has written for numerous accounting, financial, hospitality, and fashion publications worldwide.

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