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How to get the cash financing you need into your business

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Ensuring you have sufficient finance to get your venture up and running is a 
vital prerequisite for any new start-up. When starting a business, one of the most important areas to focus on is your finances.

There are a number of questions that you might want to ask yourself, including how do I work out how much money I need to start my business; what do I need to include in my start-up costs; and how can I use my savings to attract additional funds? 


You should spend time finding out the answers through research. In preparation, consider the following:

  • Look at your credit file to see whether you need to make any adjustments to repair or increase your credit rating
  • Identify where you need more knowledge, such as understanding financial terminologies, including terms such as ‘break-even analysis’, ‘net profit’ or ‘sales forecast’
  • Develop your ability to plan or attend training courses to upskill yourself, if required
  • After your research, complete a comprehensive business plan along with a cash-flow forecast that captures your short, medium and long-term plans for the next three to five years
  • Complete a sales forecast and a realistic personal survival budget. You should now estimate the total amount needed to start your business

Funding options

Conventional ways to fund your business include using savings. Try not to spend all savings prior to starting the business, but use them to leverage funding from other sources. 

Consider friends and family as a source for funding, as you are able to keep everything private and manageable. If you have experienced financial difficulties in the past and need time to get back on your feet, this could be an ideal choice. If you go for this option, you may need to create an agreement outlining the terms and conditions of repayment. 

If you own your home, extracting collateral from your property is another option, but be very careful going down this route, as your property will be at risk if you are unable to maintain the loan repayments. 

Overdrafts are worth considering, but approach banks long before you require one and make sure you understand the small print. Credit cards are not usually an ideal long-term solution for your business, but may be beneficial if you require a short-term cash-flow resource.

You should consider the additional interest rates if you are unable to repay the whole balance at the end of the month. Local credit unions can be another option, as they usually offer regular saving opportunities and short-term loans at competitive rates.

The government has a number of funding programmes that cover a vast area of initiatives. You may find that your local area has a number of public and private sector partnerships; in England these are called growth hubs, which are led by local enterprise partnerships (LEPs). LEPs offer local and national business support, which makes it easier for you to find what you need to develop your business in your vicinity.

Grants can be obtained from a number of sources, including UK Export Finance, Innovate UK and sector-specific organisations such as the Construction Industry Training Board. 

First steps

Before proceeding, complete your business plan and cash-flow forecast to identify the amount of funds required to start your business. If applying for a grant, you may have to raise 50 per cent of the costs as funders rarely agree to 100 per cent.

Explore the funding opportunities mentioned and check you meet their criteria. If possible, discuss the process with the provider before completing the application forms. If you are applying for a grant, try not to use the funds that you plan to match with the grant while waiting for your application to be processed, as evidence of the match-funding will still be required.


If you are looking for a loan or investors, consider local commercial high street banks, Start-up Loans UK or the British Business Bank. They may be able to assist with the different stages that your business goes through, from the initial start-up capital to business growth. The British Business Bank has produced The Business Finance Guide to assist you while you are seeking financial support. 

As the business begins to grow, you may want to introduce additional capital into the business. High-growth options can be sourced through equity finance, business angels, venture capitalists or private equity.