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.
The menu, route by route
1. Start Up Loans (government-backed)
£500–£25,000 per director (up to £100,000 per company), fixed 6% interest, 1–5 year terms, no arrangement fee, plus 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 under three years old (five years for a second 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 £12m 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.
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.
