5 funding options for startups

16th February 2018

If you’re considering setting up your own business, securing revenue will be high on your list of priorities to get your idea off the ground. 

In order to stand the best chance of getting that initial cash injection, you need to ensure your goals are realistic and remember your first year is usually the toughest. 

There are several funding options aimed at new businesses, but getting your hands on them can be a complicated and often stressful experience.

In this blog post, we take a look at some of the most accessible funding options for startups. 

Short-term loans

These are business loans based over a pre-agreed period of time and set to various interest rates. 

Due to the interest charged, this option is fairly expensive compared to others and requires some security (such as equity in assets) if things don’t work out as you hoped.

Business grants

The government is keen to help startups and there are more than 200 grants available to help lower your costs and grow your business. 

Visit the government’s Business Support Finder to see if there’s a suitable option out there for you. 

Venture capital schemes

Your business can benefit from 4 venture capital schemes designed to help small businesses attract investment, with investors receiving various tax breaks in return for buying bonds or shares. 

These are:

  • the Enterprise Investment Scheme
  • the Seed Enterprise Investment Scheme
  • the Social Investment Tax Relief
  • Venture Capital Trusts.

Crowdfunding

This alternative option uses an online platform to raise finance from members of the public to reach a specific goal or target value. 

Your startup will get the money as long as the financial target is met, with investors usually taking a small share in the business in return.

Pension-led funding

If you’re a director with a small self-administered pension scheme, you can loan up to 50% of the fund’s value to your business. 

This ‘commercial loan’ will be paid back into your pension with interest and is the least risky pension-led funding option. 

You can also invest up to 70% of a self-invested personal pension directly into your business through an unlisted share purchase, although it’s worth seeking professional advice first. 

Get in touch 

From writing your business plan and applying for finance, to handling payroll and managing your accounts – our team of experts can assist you every step of the way.

Contact us on enquiries@hollingdalepooley.co.uk or call 0117 973 3377 for more information about our startup services.