Getting finance

Start-up guides

There are many sources of funds available to small businesses, however not all are equally appropriate to all businesses at all times.


Different sources of finance carry different obligations, responsibilities and opportunities for profitable business. The differences have to be understood to allow you to make an informed choice.

Banks

Banks offer a range of financing options, including the most common - overdrafts and term loans. They can provide any sum, small or large - you have to repay the loan and pay interest on the outstanding balance. A bank may look to the owner to provide security for the lending.

Important information

These pages are produced for general information purposes only and should not be regarded as a substitute for the specialist advice of lawyers, accountants and other business specialists.

back to top

Hire purchase and leasing

Hire purchase and leasing companies provide funds to buy fixed assets such as vehicles, computers, office equipment, plant and machinery.

You may have to find a deposit of up to a quarter of the funding and pay the balance off over a period of time. This period will depend on the expected life of the asset. Your payments will include interest and capital. The security for the loan is the asset itself and it remains the property of the finance company, at least until it has been paid for.

Invoice factors

Invoice factors provide finance to cover the period between delivering your products to a customer and payment of the invoice. They can provide up to 90% of the value of the invoice and can, if you wish, manage the whole process of collection of the funds for you. The security taken is the full value of the invoices to your customers.

Important information

These pages are produced for general information purposes only and should not be regarded as a substitute for the specialist advice of lawyers, accountants and other business specialists.

back to top

Venture capital firms, business angels (wealthy individuals who back businesses) and corporate venturers (businesses whose primary aim is producing a product, but who also back small businesses in related sectors) provide risk capital.

Business angels may invest as little as £5,000, but the other sources of funding listed above will not usually look at anything less than £50,000. In return for a share of your company they will put up cash to help fund growth and development. They will expect to share the rewards, but usually ask for no security.

Important information

These pages are produced for general information purposes only and should not be regarded as a substitute for the specialist advice of lawyers, accountants and other business specialists.

back to top

The following organisations have set up business mentoring and advice services to help growing businesses find and apply for relevant grants:

England

  • Government Offices website
    The Government Offices (GOs) in the English regions are responsible for putting into practice locally the policies of various government departments, in particular those of the Department for Business, Enterprise and Regulatory Reform (BERR) where regional aid is concerned.
    Visit the Government Offices website
  • England's Regional Development Agencies website
    Regional Development Agencies (RDAs) are the lead bodies at regional level for coordinating inward investment, raising people's skills, improving the competitiveness of business, and facilitating social and physical regeneration. RDAs provide advice to GOs on the types of projects which are suitable for Enterprise Grants in light of their economic strategies.
    Visit the England's Regional Development Agencies website
  • Business Link website
    Business Link provides a point of entry for most of the services offered by the Department for Business, Enterprise and Regulatory Reform (BERR) and other government departments.
    Visit the Business Link website

Wales

Scotland

The Royal Bank of Scotland is not responsible for the content of external websites.

Other sources

In addition to Business Link and local GOs, trade unions, trade associations and banks also provide information and application advice. Consider using the services of a management consultancy firm who will assess the eligibility of your business for specific grants and then help with the application.

However, before deciding to use an adviser, make sure you check out the terms and conditions for their service - you may find that their charges vary considerably.

Important information

These pages are produced for general information purposes only and should not be regarded as a substitute for the specialist advice of lawyers, accountants and other business specialists.