Start with the question lenders will ask you
Before any application: what exactly is the money for, and how does it come back? “Growth” isn't an answer. “£40k of stock that turns every 60 days at a 45% margin” is. Funding conversations go well when the use of funds is specific and the repayment source is visible in your numbers.
Then match the route to the job:
- Buying things that earn (stock, equipment, a van) → debt or asset finance. Cheapest money, keeps your equity.
- Smoothing cashflow gaps → working capital, invoice finance, revolving credit.
- Building something unproven (product, R&D, market entry) → grants first, then equity. Debt against uncertainty is how founders end up personally guaranteeing a failed experiment.
The full guide walks through every route on the UK market — eligibility, true cost, timelines — plus the application pack that gets yeses.
What this guide covers
- The full menu: loans, grants, debt, RBF and equity compared
- What each route really costs — including the hidden ones
- What lenders and investors actually check
- How to search 1,000+ providers in one pass
The menu, route by route
1. Start Up Loans (government-backed)
£500–£25,000 per founder (up to £100,000 per company across four co-founders), fixed 7.5% interest, 1–5 year terms, no application fee, no early repayment fee, plus up to 12 months' free mentoring. It's a personal loan for business use, so no trading history needed — the standard first cheque for pre-revenue and early-trading businesses. The rate rose from 6% to 7.5% on 6 April 2026, and the eligibility window widened at the same time from 36 months of trading to 60 months; anyone who drew down before that date keeps 6% for the life of their loan.
2. Grants
Free money, competitively awarded. Innovate UK for genuine innovation; regional growth funds; sector schemes (green tech, creative, food production). The real cost is time — applications take days of work and success rates are low — but a won grant is non-dilutive and non-repayable. The trick is knowing what's open right now, which changes monthly: our Swoop-powered portal tracks live schemes so you don't have to.
3. Bank and alternative debt
Term loans, overdrafts, revolving credit facilities. Banks want 1–2 years of trading history and often personal guarantees; alternative lenders move faster at higher rates (think 8–20%+ APR against a bank's 7–12%). Always compare the total cost of credit, not the monthly payment.
4. Asset and invoice finance
Asset finance spreads equipment costs against the asset itself (easier to get — the kit is the security). Invoice finance advances you 70–90% of unpaid invoices immediately; powerful for B2B startups whose customers pay on 60-day terms, expensive if you treat it as permanent capital.
5. Revenue-based finance
For businesses with recurring revenue: an advance repaid as a percentage of monthly income. No dilution, no fixed repayment cliff — but effective costs often land between debt and equity. Read the multiple carefully (a 1.4× repayment cap on money repaid in 14 months is very expensive money).
6. Equity
Angels, then funds. The most expensive money you'll ever take — a 15% seed stake in a business that works costs millions later — and the only kind that suits genuinely unproven, high-upside bets. UK angels rely heavily on SEIS/EIS tax relief (SEIS: up to £250k raised, investors get 50% income tax relief; EIS: up to £24m lifetime, 30% relief), so getting advance assurance from HMRC before you pitch is near-mandatory. That's an accountant job — it's ours, if you want it.
A worked comparison: £40,000, three ways
The figures below are illustrative, for a company that needs £40,000 to buy stock and hire one person.
- Start Up Loans. Two founders take £20,000 each at a fixed 7.5% over five years. Repayments are £801.51 a month, total repaid £48,090.60, so the money costs £8,090.60. No equity leaves the business, and the founders carry it personally.
- Revenue-based finance. £40,000 advanced against a 1.4× repayment cap, cleared out of monthly revenue in fourteen months. You repay £56,000, so the money costs £16,000 — roughly double the loan — but nothing is fixed and nothing is guaranteed personally.
- Equity. £40,000 for 10% of the company. It costs nothing today and never has to be repaid. If the company is worth £4m at exit, that 10% is £400,000 — ten times the cash you raised, and the reason equity sits last on the list rather than first.
None of these is wrong. The point is that the same £40,000 costs £8,090, £16,000 or £400,000 depending on which document you sign, and the cheapest one is usually the one founders find least exciting.
What every lender and investor checks
- Clean, current accounts — bookkeeping up to date, no unexplained director's loans.
- A forecast that survives questions — monthly cashflow, assumptions stated, downside case included.
- Personal credit — for early-stage debt, your file is the company's file.
- Use of funds — specific, and matched to the product they sell.
The order matters Cheap money first: grants → government-backed loans → asset/working-capital finance → RBF → equity. Founders who pitch equity for a stock purchase are overpaying by an order of magnitude.
How the portal fits
Our funding portal, powered by Swoop, takes one profile and matches it against 1,000+ lenders, grant schemes and finance providers — soft search only, no obligation. Then we do the part software can't: sense-check the real cost of each offer against your cashflow before you sign. Free to every client.
