Starting your own business is exciting, but securing the right financing often goes a long way to determining its success. Whether you're just launching or in your first few years of trading, there are several options available to help fund your start up.
Starting a business often means getting creative with money. You might dip into your savings or ask family for help. But as you grow, there’s every chance you’ll need to explore other options to help you achieve your goals.
But where do you start? Ultimately, it all depends on the type of finance your new business needs.
Business loans can be a good option for start ups needing a lump sum. To meet our lending criteria, start ups will need to be trading for more than 12 months.
Depending on the loan amount, we may ask for a personal guarantee. Start ups that meet our criteria can typically borrow between £10,000 to £750,000 with repayment terms up to 6 years.
Flexible lines of credit that let you borrow up to a set limit as needed can be helpful for managing cash flow.
FlexiPay from Funding Circle gives you access to up to £250,000, which can be repaid over 1, 3, 6, 9 or 12 months – whatever works best for your cash flow. It's business finance that adapts to your needs, helping you navigate the exciting (and sometimes unpredictable) world of running a start up.
Business credit cards can provide a convenient way to manage expenses and build your company's credit profile. They're often helpful for day-to-day purchases and can smooth out cash flow.
Our Cashback business credit card pays you back for your spending. You'll earn an unbeatable 2% cashback on all your business spending for the first 6 months, up to £2,000. After that, it's 1% cashback, uncapped. Cover everything from office supplies to those big purchases that help your start up grow.
Government initiatives often support small businesses through guaranteed loan schemes. These programs aim to make finance more accessible, sometimes offering better terms than standard commercial loans.
One such scheme is the Growth Guarantee Scheme (GGS), which we offer at Funding Circle. It's designed to help UK businesses invest and grow. Through GGS, you can borrow between £25,001 and £250,000, with loan terms up to 6 years. If we can offer you better terms outside the scheme, we'll do so.
If your start up needs items like vehicles or machinery, asset finance can be a good option. It lets you spread the cost over time, which can help with cash flow. The equipment itself often acts as security for the loan, which can make it easier to get approved.
We work with a panel of trusted partners that can fund a wide range of business assets. Plus, with asset finance you can get a deal up to 50% cheaper than a term loan.
Peer-to-peer lending is when online platforms connect businesses directly with individual lenders. These services can offer an alternative to traditional bank loans, sometimes with competitive rates. The application process is often quicker and may be less stringent than bank lending.
Wealthy individuals who invest their own money in exchange for equity and often provide valuable expertise are known as angel investors. They typically invest in early-stage start ups, offering capital when traditional financing options might be limited. In return, they usually take a minority stake in the company.
Venture capital is when professional firms invest larger sums in high-growth potential start ups. They usually take a significant equity stake. Venture capital firms manage funds from institutional investors, focusing on businesses with strong growth prospects. Investments often come in rounds (Series A, B, C), with amounts increasing as the company grows.
Crowdfunding allows start ups to pitch their concept to a wide audience, often through dedicated websites. Campaigns can be reward-based, offering products or perks to backers, or equity-based, where investors receive shares in the company. This method is particularly useful for consumer-facing products or services. However, running a successful campaign requires significant time and marketing effort.
Pros | |
|---|---|
Business loans | Maintain business ownership and get fixed repayment terms. |
Revolving credit facilities | Effective for managing cash flow and you only pay for what you use. |
Business credit cards | Interest-free period if paid in full and potential rewards or cashback. |
Government-backed loan schemes | Can have more favourable terms than normal business loans. |
Asset finance | Usually the cheapest option for assets & vehicles. |
Peer-to-peer lending | Can be more flexible and may fund riskier ventures. |
Angel investors | Brings expertise and connections. |
Venture capital | Large sums are more available and can fuel rapid growth. |
Crowdfunding | Access to a large number of investors and provides market validation. |
Cons | |
|---|---|
Business loans | Harder for new businesses to obtain and may require personal guarantee. |
Revolving credit facilities | Interest rates can be higher than loans. |
Business credit cards | High interest rates if not paid off. |
Government-backed loan schemes | Stricter criteria to qualify and typically smaller lending amounts. |
Asset finance | Risk of losing your asset if payments are missed. |
Peer-to-peer lending | Less regulated than traditional lending and dependent on the platform's success. |
Angel investors | Loss of some equity and control, and can be challenging to secure. |
Venture capital | Significant loss of equity and control, and time-consuming process to secure. |
Crowdfunding | Requires significant marketing effort and poses potential intellectual property risks. |
Pros | Cons | |
|---|---|---|
Business loans | Maintain business ownership and get fixed repayment terms. | Harder for new businesses to obtain and may require personal guarantee. |
Revolving credit facilities | Effective for managing cash flow and you only pay for what you use. | Interest rates can be higher than loans. |
Business credit cards | Interest-free period if paid in full and potential rewards or cashback. | High interest rates if not paid off. |
Government-backed loan schemes | Can have more favourable terms than normal business loans. | Stricter criteria to qualify and typically smaller lending amounts. |
Asset finance | Usually the cheapest option for assets & vehicles. | Risk of losing your asset if payments are missed. |
Peer-to-peer lending | Can be more flexible and may fund riskier ventures. | Less regulated than traditional lending and dependent on the platform's success. |
Angel investors | Brings expertise and connections. | Loss of some equity and control, and can be challenging to secure. |
Venture capital | Large sums are more available and can fuel rapid growth. | Significant loss of equity and control, and time-consuming process to secure. |
Crowdfunding | Access to a large number of investors and provides market validation. | Requires significant marketing effort and poses potential intellectual property risks. |
Select the option that best fits your start up's needs.
You can apply for any of our products in 7 minutes or less.
Get an instant decision for your chosen finance type
If you believe you meet the criteria, you can apply in minutes and access funds quickly to seize opportunities. At Funding Circle, we are:
If you’re looking for fast, flexible funding, we have a range of loan options available to start ups with a trading history of at least 1 to 2 years.
We require 1 year trading history for business loans, FlexiPay and Cashback business credit card, and 2 years’ trading history for government-backed loans and asset finance.
Cafe and bakery
Kent
"Daron at Finch House took business finance of £125,000 to fit out a new shop with equipment and furniture."
We offer business loans, FlexiPay line of credit, cashback business credit card, and asset finance through partners. The right option depends on your specific needs and how long you've been trading.
Amounts range from £1,000 up to £5 million depending on the product. Your limit will be based on factors like time in business, turnover and credit score.
It depends on the product. Unsecured options are available, while asset finance uses the equipment as security. We'll explain any requirements clearly.
Our business loan rates start from 6.9% per year, but rates are higher for businesses younger than 2 years. FlexiPay has 0% interest and a simple fee per transaction. Cashback credit card rates start at 14.9% per year, with representative 34.9% APR (variable).
You can apply online in just 7 minutes. Decisions are often the same or next day, with funds arriving shortly after.
Eligibility varies by product. Generally, you'll need to have been trading for at least 1-2 years. Check individual product pages for full criteria.
