Funding is almost always a challenge when you are starting or growing a business. Even when sales are rising, many businesses hit a finance gap: you need to buy stock, pay salaries or invest in equipment before customer payments arrive. Whatever the trigger, more businesses fail because of poor cash flow than because they are unprofitable. Planning ahead, keeping tight credit control and putting a robust financial management system in place will help you spot funding needs before they become urgent.

If you do need extra finance, here are ten practical ways to find business funding in the UK today.

1. Friends and family

Relatives and friends remain one of the most common sources of finance for small businesses. The advantage is speed and flexibility; the risk is damaged relationships if the business struggles. Put the agreement in writing from day one: amount, interest if any, repayment schedule and what happens if repayments are missed. Clarity protects both sides and makes it far easier to maintain goodwill if things do not go to plan.

2. Offering shares

Selling shares to personal contacts or outside investors can bring in capital without monthly repayments. A private investor, often called a business angel, may also offer expertise and contacts. Be prepared to give up a minority stake and, sometimes, a board seat. The UK offers generous tax reliefs for investors in eligible early-stage companies, including the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).

3. Start Up Loans

The government-backed Start Up Loans scheme is a strong first port of call for new businesses. It offers personal loans of up to £25,000 per co-founder, to a maximum of £100,000 per business, at a fixed interest rate of 6% per annum. Repayment terms run from one to five years and successful applicants also receive free mentoring and support. For advice on making your application stand out, read our inside tips on the Start Up Loans application process.

4. Remortgage

If you own a home and need more than a small loan can provide, remortgaging or a further advance from your mortgage lender may be an option. Interest rates can be lower than unsecured business finance, but you are putting your home at risk if the business cannot keep up repayments. Take independent financial advice before proceeding.

5. The bank

High street banks are still the largest providers of business finance in the UK, offering term loans, overdrafts and asset finance. They usually require security and a strong trading history. If you cannot provide full security but have a viable business, ask about the government-backed Growth Guarantee Scheme, which launched in July 2024 as the successor to the Recovery Loan Scheme. It supports lending of up to £2 million to eligible SMEs and can be accessed through accredited lenders, including many high street banks.

6. Community Development Finance Institutions

Community Development Finance Institutions (CDFIs) are not-for-profit, locally focused lenders that help businesses unable to obtain bank finance. They can lend to viable businesses with little or no security and often provide hands-on support. To find a CDFI near you, see our article on community finance.

7. Government grants

Grants do not have to be repaid, but competition is fierce and eligibility rules are strict. Start with the gov.uk business finance and support finder, your local Growth Hub and your council’s economic development team. For practical advice on improving your chances, read our guide to grants for women in business.

8. Using a credit card

A business or personal credit card can provide a short-term stopgap for small purchases or cash flow gaps. It is convenient, but interest rates can be high and missed payments damage your credit rating. Only use this route if you are confident you can clear the balance quickly.

9. Crowdfunding

Crowdfunding raises money while building awareness. Reward crowdfunding asks supporters to pre-order a product or receive a gift; equity crowdfunding sells small shares in your business. Both require a compelling pitch, realistic targets and active promotion across your network and social media. Platforms such as Crowdcube, Seedrs and Kickstarter are well known in the UK.

10. Peer-to-peer lending

Peer-to-peer (P2P) platforms are regulated by the Financial Conduct Authority and match businesses needing loans with individual and institutional investors. Funding Circle is one of the largest peer-to-business lenders in the UK and has facilitated billions of pounds in lending since 2010. Loans typically range from £10,000 to £500,000 for established businesses and can be used for working capital, expansion, asset finance or one-off costs. Decisions are usually faster than traditional banks, but rates vary and loans may be secured or unsecured.

When approaching any lender or investor, you will need a clear business plan. You can download our free business plan template and adapt it for each pitch. Put yourself in the lender’s shoes: show how the money will be used, how the business will generate returns and exactly how and when the finance will be repaid. A well-written plan not only reassures funders but also keeps your own ambitions and milestones firmly in sight.