Access to finance remains one of the biggest hurdles for UK entrepreneurs. If you want to raise additional funds for your business, the route you choose will depend on your stage, sector, appetite for risk, and how much control you want to keep. Many promising businesses stall because they cannot secure the capital needed to scale.

For women-led businesses the gap is especially pronounced: all-female founder teams received just 2% of UK equity investment in 2024, according to the British Business Bank’s Small Business Equity Tracker 2025. The 2019 Alison Rose Review of Female Entrepreneurship estimated that up to £250 billion could be added to the UK economy if women started and scaled businesses at the same rate as men, yet women founders consistently report finding it harder to access growth funding than their male counterparts. You can find baseline data on the scale of women’s enterprise in the Women in Business: Key UK Facts page.

Whether you are testing a new idea, buying equipment, or expanding into new markets, raising additional funds is rarely a one-size-fits-all process. Below are four practical ways to raise additional funds for your business in the UK.

How to raise additional funds for your business

Before approaching any source, be clear on what the money is for, how much you need, and what you are prepared to offer in return. A well-written business plan, realistic cash-flow forecast, and a concise pitch will strengthen every application or conversation.

1. Family and friends financing

Asking people you trust for investment or a loan is often one of the fastest ways to access early-stage capital. Because the arrangement is personal, terms can be more flexible than a bank loan, and decisions are usually quicker. However, mixing money and relationships carries real emotional risk, so treat it as formally as any other funding deal.

Draw up a written agreement that sets out the amount, repayment schedule, interest (if any), and what happens if the business struggles. If the investment is in exchange for equity, record the shareholding clearly.

If friends and family are investing in an early-stage trading company, they may also be able to claim tax relief through the Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS), which can make the opportunity more attractive. As of the 2026/27 tax year, SEIS allows a company to raise up to £250,000 and an individual investor to claim relief on up to £200,000 per tax year. EIS allows qualifying companies to raise up to £5 million per year and £12 million in total, with individual investors able to claim relief on up to £1 million per tax year, or £2 million if at least £1 million is invested in knowledge-intensive companies. See the latest thresholds on GOV.UK guidance on SEIS and EIS. It is sensible to take legal advice before anyone signs, so both sides understand the risks and the relationship is protected.

2. Angel investing

Angel investors are typically wealthy individuals who invest their own money in early-stage businesses in return for equity. In the UK, angel networks such as the UK Business Angels Association, Angel Academe and Investing Women actively support women founders. Investments can range from tens of thousands to several hundred thousand pounds, and angels often bring valuable mentoring and introductions alongside cash.

Angel investment suits businesses with high growth potential and a clear exit route, such as a trade sale or public listing. It is less suitable if your ambition is to build a lifestyle business or keep full family ownership, because you will be expected to give up a stake and involve investors in major decisions. Be prepared for thorough due diligence and negotiate terms carefully. For more on the wider funding gap, see our Female Founder VC Funding Gap analysis.

3. Grants and government funding schemes

Grants are one of the most attractive funding sources because they do not have to be repaid and do not dilute your ownership. They are usually awarded for a specific purpose, such as research and development, innovation, job creation, sustainability, or regional economic growth. Competition is fierce and applications take time, but the return can be significant.

Current UK options include Innovate UK grants for research and development, which can cover up to 70% of eligible project costs depending on the competition, and the British Business Bank’s Start Up Loans scheme for early-stage businesses, which offers loans of up to £25,000 per director to a maximum of £100,000 per business at a fixed 6% annual interest rate. Regional support is delivered through local enterprise partnerships, combined authorities and councils. Eligibility varies by sector, location, turnover and employee numbers, so always check the latest criteria on GOV.UK. You can also explore our guide to Start Up Loans for Female Founders.

4. Bootstrapping or self-funding

Bootstrapping means growing the business using your own savings, personal income, or revenue generated by the business itself. It is common in the earliest stages, when external investors or lenders want evidence of traction before they commit. Self-funding keeps you in full control, avoids interest and repayments, and forces disciplined spending.

The downside is that growth may be slower because you are limited by the cash you can personally put in or reinvest. It can also put your personal finances at risk if the business fails. Given the well-documented gap in external equity finance for women-led businesses, bootstrapping is a route many women founders use to reach key milestones before seeking larger external funding.

Deciding on the right funding source

When choosing how to fund your business, weigh convenience against cost and control. Loans and credit must be repaid with interest, which can strain cash flow, while equity investment means sharing future profits and decision-making. Grants are attractive but competitive and restrictive, and self-funding preserves ownership but can limit speed.

Start with your long-term goals. If you plan to scale quickly and exit, equity investment may be the right fit. If you want steady, independent growth, bootstrapping or a small loan might be better. Whatever route you choose, take professional advice from an accountant or solicitor, read every agreement carefully, and make sure the funding structure supports the business you want to build.

Fundamentally, the decision to raise additional funds for your business should be strategic. Start with your goals for the business, get professional advice and then get out there and find the funds to make it happen.