Ways For Startups To Find Funding


Ways For Startups To Find Funding

01 Jan 2018

The UK is becoming increasingly entrepreneurial, with people viewing working for themselves or launching a small business as a viable and rewarding career option.

However securing startup capital is notoriously difficult, the funding options for new enterprises are limited, to say the least. Most lenders want to see a track record of success before they advance any cash and if a lender does step up to the plate they usually want security against the debt, which means many entrepreneurs end up putting up their home up as collateral.

On the plus side, the amount of capital needed to start the average business these days isn’t as much as what entrepreneurs were seeking several years ago. According to Angel Investment Network, 40 per cent of new businesses in the UK last year needed less than £10,000 in start-up funding and about two-thirds of new ventures required under £100,000. Part of the reason for this streamlining of capital is that businesses have replaced manpower and extravagant marketing campaigns with technology and a more hands-on operational approach.

Here are the real ways that most entrepreneurs fund their startups:

Personal savings

According to research, entrepreneurs use personal savings more than any other source of capital to fund their startup business. Those without personal savings rely on friends, family or angel investors for investment.


Some founders keep up their day job and use their income to build a product or start a company. Two famous examples: Steve Chen was working at Facebook when he first started tinkering on YouTube, and Markus Persson was at King.com while building the earliest version of Minecraft.

Credit cards

Credit card debt puts entrepreneurs at risk of damaging their personal credit, in addition, they face high-interest rates and late payment fees. However, credit cards provide easy access for many entrepreneurs before they start generating enough revenue to cover payroll or their own living expenses.

Airbnb’s Brian Chesky admitted to students at Stanford University that he and co-founder Joe Gebbia racked up tens of thousands of dollars in credit card debt to keep the lights on in their early days.


Alternative financing platforms, including crowdfunding, like Crowdcube and Seedrs or other investment syndicates allow entrepreneurs to raise money in return for an equity stake. Crowdfunding is a great way for companies to raise more than just money. Listing a business on a large platform such as Crowdcube brings increased exposure for a business in the form of new customers, clients or even new contracts.


Small business loans and lines of credit are available from some providers and the UK government backed Start Up Loan scheme offers a much-needed boost for British entrepreneurs.

The Start Up Loans Company is a UK-wide scheme which offers a repayable loan to individuals who are 18 years or over and who have a viable business idea but no access to finance. The scheme funds businesses in every sector. As well as financial backing all loan recipients are given access to a mentor, free training events, and exclusive business offers.

York Lane Finance is part of a network of official Start Up Loans Company referral partners across the UK who signpost people to the scheme. We do not provide any business support as part of this partnership, and will not charge you for anything related to Start Up Loans Company.

We also partner with some equity platforms and investor networks and can help you raise equity finance. Call us (0800 292 2151) for more information.

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