Every way a UK business can raise money, cheapest first.
62 ways to fund a business, from cash you are already owed to selling shares on a stock market. Each one shows its downsides as clearly as its upsides, with sources and the date we last checked them.
Ordered by cost, never by who pays us. Nobody does. Filter to see what might fit your business, start from your situation, or compare routes side by side.
Find what fits your business: 9 questions
- L0
Free or nearly free
Little or no cash cost, though most take time and admin. Some bring money in, and a few have small fees.- Own cash and no-cost
Customer prepayments, deposits and pre-sales
Ask customers to pay some or all of the price before you deliver. The cash arrives before your costs, so you borrow less, but you owe customers the goods or a refund until you deliver.
Days - Own cash and no-cost
Statutory late-payment interest and compensation
If another business pays you late, the law lets you add interest and a fixed compensation sum to the debt. It costs nothing to claim and can speed up payment.
Days - Own cash and no-cost
Supplier trade credit (negotiated payment terms)
Agree with your suppliers to pay them some time after they deliver. It works like a short, interest-free loan, but suppliers set the limits and may want a track record first.
Weeks - Grants, tax reliefs and prizes
Capital allowances, Patent Box and creative-industry reliefs
Tax reliefs that cut your tax bill when you buy equipment, earn profits from patents, or make films, TV, games or shows. They do not bring in new money, but they leave more of your own cash in the business.
Months - Grants, tax reliefs and prizes
Equity-free accelerators, fellowships and prizes
Programmes and competitions that give founders money, training or both without taking shares. Places are limited and competitive, and the money is usually modest.
MonthsUp to £75k - Grants, tax reliefs and prizes
Innovate UK grants
Competitive grants from the UK's innovation agency that pay part of the cost of innovation projects. You do not pay them back, but you must fund the rest of the project yourself.
Months - Grants, tax reliefs and prizes
Local, regional and sector grants
Grants from councils, combined authorities, the devolved governments and sector bodies, often for equipment, jobs, energy saving or exporting. You do not repay them, but they are usually small and come and go.
MonthsUp to £315k - Grants, tax reliefs and prizes
Research and development (R&D) tax relief
Companies that spend money on qualifying research and development can claim it back through Corporation Tax, as a tax credit or, for some loss-making companies, as cash.
Months - Crowdfunding and community finance
Donation-based crowdfunding
People give money to a cause or community project through an online platform and expect nothing back. It costs nothing but fees and effort, but it only works for projects people want to support.
Months - Crowdfunding and community finance
Reward-based crowdfunding
People pay in advance for a reward, often the product you plan to make, through an online platform. You give up no shares and repay nothing, but you must deliver what you promised.
Months
- Own cash and no-cost
- L1
Very cheap or subsidised
Borrowing on better terms than the market, usually because a public body, community lender or large buyer is involved.- Own cash and no-cost
HMRC payment plan (Time to Pay)
If you cannot pay a tax bill on time, HMRC may agree a payment plan so you can pay it off in monthly instalments instead of all at once.
Days - Government-backed and community lending
Community development finance (CDFI) loans
Loans from Community Development Finance Institutions, lenders that exist to support small businesses, start-ups and sole traders that mainstream banks often overlook.
DaysPersonal guarantee likely - Government-backed and community lending
Growth Guarantee Scheme
A British Business Bank scheme that gives accredited lenders a 70% government guarantee, so they can offer loans, overdrafts, asset finance and invoice finance to smaller businesses they might otherwise turn down.
Weeks£1k to £2mPersonal guarantee likely - Government-backed and community lending
Social investment for charities and social enterprises
Loans and blended grant-and-loan packages for charities and social enterprises, from social investors that want a social return as well as their money back. Often unsecured, and usually only for organisations with a social purpose.
MonthsFrom £5k - Government-backed and community lending
Start Up Loans
A government-backed personal loan of up to £25,000 at a fixed rate, for people starting a business or in their first five years of trading, with 12 months of free mentoring.
Weeks£500 to £25k - Government-backed and community lending
UK Export Finance General Export Facility
UK Export Finance, the government's export credit agency, partly guarantees your bank's finance so exporters can get working capital and trade finance facilities more easily.
WeeksUp to £25mPersonal guarantee likely - Supplier and buyer-led finance
Supply-chain finance (reverse factoring)
A large customer sets up a scheme so its suppliers can be paid early by a finance company, at a cost based on the customer's credit rating rather than the supplier's.
Weeks
- Own cash and no-cost
- L2
Mainstream secured debt
Standard borrowing from banks and mainstream lenders, often secured on assets or backed by a personal guarantee.- Government-backed and community lending
British Business Bank regional investment funds
Government-backed funds for smaller businesses in each nation and region, offering loans from £25,000 to £2 million and equity up to £5 million through local fund managers. Terms are commercial, not subsidised.
Weeks£25k to £5mLoans, or shares if you choosePersonal guarantee likely - Government-backed and community lending
Development Bank of Wales
The Welsh Government's own development bank, offering loans from £1,000 to £10 million and equity investment to businesses based in Wales or moving there. Loans are priced on risk.
Weeks£1k to £10mLoans, or shares if you choosePersonal guarantee likely - Government-backed and community lending
Invest NI loan and equity funds
Loan and equity funds backed by Invest NI, Northern Ireland's economic development agency, from small business loans of £10,000 to equity rounds of up to £2.5 million. Each fund is run by a private fund manager.
Weeks£10k to £2.5mLoans, or shares if you choosePersonal guarantee likely - Government-backed and community lending
Scottish National Investment Bank
Scotland's public development bank, which invests £1 million to £50 million of long-term debt or equity in businesses and projects that serve its missions: net zero, places and innovation.
6 months or more£1m to £50mLoans, or shares if you choose - Bank and mainstream debt
Asset finance (hire purchase and leasing)
Spread the cost of equipment, vehicles or machinery over time through hire purchase or leasing, instead of paying for it all up front.
Weeks - Bank and mainstream debt
Asset refinance and sale and leaseback
Raise cash against equipment, vehicles or property the business already owns, and keep using them. The lender takes ownership until you have paid it back, and can take the asset if you do not.
Weeks - Bank and mainstream debt
Bank term loan
A fixed amount borrowed from a bank or other mainstream lender and repaid in regular instalments over an agreed term, with interest.
WeeksPersonal guarantee likely - Bank and mainstream debt
Business credit card
A credit card in the business's name, with a spending limit and often a short interest-free period. Handy for everyday costs and small purchases, but expensive if you carry a balance.
DaysPersonal guarantee likely - Bank and mainstream debt
Business overdraft
A borrowing limit on your business bank account. You pay interest only on what you use, but the bank can usually ask for it back at any time.
DaysPersonal guarantee likely - Bank and mainstream debt
Commercial mortgage
A long-term loan secured on business property, to buy premises you will use yourself or rent to another business.
Months - Bank and mainstream debt
Revolving credit facility
A credit limit you can draw on, repay and draw again, paying interest only on what you use. It is quick and flexible for short-term needs, but usually costs more than a term loan.
DaysPersonal guarantee likely
- Government-backed and community lending
- L3
Specialist secured debt
Borrowing secured on specific assets such as invoices or stock, with more fees and conditions than mainstream debt.- Asset-based and specialist lending
Asset-based lending (ABL)
A loan or credit line secured on a mix of business assets, such as invoices, stock, equipment, property and sometimes intellectual property, with the amount based on what those assets are worth.
Weeks - Asset-based and specialist lending
Invoice discounting
Borrow against your unpaid invoices while you keep collecting payments from customers yourself, usually without them knowing you use finance.
WeeksPersonal guarantee likely - Asset-based and specialist lending
Invoice factoring
A finance company pays you most of the value of your unpaid invoices straight away, then collects payment from your customers and pays you the rest, minus its fees.
DaysPersonal guarantee likely - Asset-based and specialist lending
Mezzanine and private credit (larger companies)
Tailored loans from specialist funds rather than banks, for established companies, often for acquisitions, expansion or refinancing. Flexible and larger than bank lending allows, but more expensive, and mezzanine can turn into shares if you cannot repay.
MonthsMay give up shares - Asset-based and specialist lending
Selective and spot invoice finance
Get paid early on just the invoices or customers you choose, instead of your whole sales ledger. Useful for occasional cash gaps and smaller businesses, but each invoice costs more than a full facility.
Days - Asset-based and specialist lending
Stock and purchase order finance
Finance to pay suppliers for stock, or to fulfil a large customer order, repaid when the goods are sold. It lets you take on bigger orders, but fees are high and the money can only be used for those goods.
Weeks - Asset-based and specialist lending
Trade finance (letters of credit, bonds and trade loans)
Bank products that help businesses buy from or sell to other countries: guarantees that you will be paid, bonds your buyer may ask for, and short loans to pay suppliers. They reduce the risk of trading abroad, but they are complex and usually need a track record.
Weeks - Asset-based and specialist lending
Venture debt
A loan for fast-growing companies that are already backed by venture capital, used to stretch the money from an equity round further without selling more shares.
Weeks - Alternative and fast debt
Peer-to-peer business lending
Borrow from many individual and institutional investors through an online lending platform regulated by the FCA, instead of from a single bank.
DaysPersonal guarantee likely - Public and quasi-public markets
Listed bonds and private placements (larger companies)
Larger companies borrow from many investors at once by issuing bonds, either listed on a stock exchange or placed privately with institutions. It can raise large sums for years at a fixed or floating rate, but it needs a strong credit story and detailed documents.
Months
- Asset-based and specialist lending
- L4
Expensive or fast
Quick to arrange, often unsecured, and usually the most expensive way to borrow.- Alternative and fast debt
Bridging loan
A short-term loan, usually secured on property, that "bridges" a gap until longer-term money arrives, such as a mortgage or a sale.
Days - Alternative and fast debt
E-commerce and payment platform finance
Online shop and payment platforms offer funding based on your sales through them, repaid automatically as a share of those sales. It is quick and simple to get, but only open to their own sellers and the fixed fee can be costly.
DaysFrom £1k - Alternative and fast debt
Merchant cash advance
A lump sum for businesses that take card payments, repaid automatically as a share of each card sale until the advance and a fixed fee are paid off.
Days - Alternative and fast debt
Mini-bonds and loan notes (non-transferable debt)
Borrow directly from the public, often your customers, by issuing bonds or loan notes that pay interest and cannot be traded. Strict rules apply to who you can offer them to, and investors can lose all their money.
MonthsUp to £5m - Alternative and fast debt
Revenue-based finance
An advance repaid as a fixed share of your future sales, plus a flat fee agreed up front. Repayments fall when sales are slow, but the fee can make it expensive, especially if you repay quickly.
Days - Alternative and fast debt
Short-term unsecured business loans
Fast loans from online and specialist lenders, repaid over one to 12 months, with no assets needed as security. Quick to arrange, but interest and fees are high and owners usually have to give a personal guarantee.
DaysPersonal guarantee likely
- Alternative and fast debt
- Equity rungs. These routes cost no interest, but you give up part of the ownership and control of your business. They are ranked by how much you give up, not by a made-up interest rate. Over time, equity can be the most expensive money of all.E1
Light dilution
You sell a small share of the company, usually to many small investors or people you know, and keep control of how it is run.- Crowdfunding and community finance
Community shares
Co-operatives and community benefit societies raise money by selling withdrawable shares to members of the community, who get a vote and a stake in a business that matters locally.
MonthsGives up shares - Crowdfunding and community finance
Equity crowdfunding
Selling shares in your company to many investors, often including your customers, through an online platform authorised by the FCA.
MonthsGives up shares - Private equity investment
Friends and family
Money from people you know, as a loan, as shares, or both. Often the first money into a new business and on flexible terms, but it puts relationships at risk if things go wrong.
WeeksLoans, or shares if you choose - Hybrid instruments
Advance subscription agreement (ASA)
An investor pays now for shares that the company will issue later, usually at the next funding round. If set up correctly, it can qualify for SEIS or EIS tax relief, unlike most convertible loan notes.
WeeksGives up shares - Hybrid instruments
Convertible loan notes (CLNs)
An investor lends money to your company on the understanding that the loan will usually turn into shares later, often at a discount, when a set event such as the next funding round happens.
WeeksMay give up shares
- Crowdfunding and community finance
- E2
Significant dilution and investor rights
Investors take a meaningful stake and usually get rights such as a board seat, a veto over big decisions, or a preferred return.- Private equity investment
Angel investment
Experienced individuals, often investing together as a syndicate, buy a minority stake in an early-stage company and give advice and contacts as well as money.
Months£5k to £500kGives up shares - Private equity investment
Corporate venture capital
A large company invests in a smaller one that could help its own business, in return for shares. You get money plus the corporate's contacts and know-how, but you share your ideas with a possible competitor.
6 months or moreFrom £1mGives up shares - Private equity investment
Family offices and wealthy private investors
Wealthy families, often through a private company that manages their money (a family office), invest directly in businesses. They can be more patient and flexible than funds, but there is no standard process and they are hard to find.
6 months or moreGives up shares - Private equity investment
Venture capital
Professional investment funds buy minority stakes in young, high-growth companies, usually in several rounds, and expect a large return when the company is sold or listed.
6 months or moreGives up shares - Public and quasi-public markets
PISCES (trading days for private company shares)
A new kind of regulated market where shareholders in a private company can sell existing shares on set trading days. It does not raise new money for the company, but it lets founders, early investors and staff sell some shares while the company stays private.
MonthsGives up shares - Tokens and digital assets
Token offerings (ICO, IEO, IDO) and crypto exchanges
Raising money by creating a cryptoasset (a "token") and selling it to buyers, directly or through a crypto exchange. It is very high risk, heavily restricted in the UK, and about to be regulated much more tightly.
MonthsMay give up shares - Tokens and digital assets
Tokenised securities (digital shares and bonds)
Shares or bonds issued and recorded on a blockchain or similar digital ledger, instead of in a traditional register. A UK sandbox lets approved venues issue and trade them, but this is new and mainly for larger issuers.
6 months or moreLoans, or shares if you choose
- Private equity investment
- E3
Major dilution, loss of control or public obligations
Investors take control, or the company becomes publicly traded and takes on ongoing public rules, costs and scrutiny.- Private equity investment
Employee ownership trust (a sale, not a raise)
Owners sell a controlling stake to a trust that holds it for all employees, usually paid over time from the company's profits. This is a way for owners to sell, not a way for the business to raise money.
6 months or moreGives up shares - Private equity investment
Management buy-out or buy-in
Managers buy the business from its owners, usually funded by private equity and borrowing. It lets owners sell and managers take control, but it loads the business with debt and gives investors a large stake.
6 months or moreGives up sharesPersonal guarantee likely - Private equity investment
Private equity (including buy-outs)
A private equity firm takes a large or controlling stake in a mature business to help it grow, often through a management buy-out or buy-in, and sells the stake a few years later.
6 months or moreGives up shares - Public and quasi-public markets
AIM (London Stock Exchange growth market)
The London Stock Exchange's market for smaller and growing companies. You sell shares to public investors and your shares can then be traded, in return for ongoing rules, costs and scrutiny.
MonthsGives up shares - Public and quasi-public markets
Aquis Stock Exchange (AQSE) Growth Market
A UK stock exchange for growth companies, with an Access segment for early-stage companies and an Apex segment for larger ones. A route to raise money from public investors with lighter entry than larger markets, but with ongoing public company duties.
MonthsGives up shares - Public and quasi-public markets
London Stock Exchange Main Market listing
Listing your shares on the London Stock Exchange's Main Market, under the FCA's UK Listing Rules, to raise money from public investors. It suits larger companies.
6 months or moreGives up shares
- Private equity investment