How to Finance a Start-Up Business

Some say “all you need is a good idea” when it comes to starting your own business, however if you don’t have the finances available, it will always stay as just this – an idea. If you would like to see your business start-up dreams become a reality you’re going to need funding.

A friendly shop owner behind a counter

Here we’ll take you through the basic ways of financing a start-up business:

How Much Will You Need to Finance a Start-up?

So, you have a great idea for a product or business service, but how much money will you need to bring this to fruition? Do some hard sums, cost everything out and discover how much finance you will really need. Forecasts for sales and expenditure are an essential part of this.

And remember, be realistic! You are likely to spend more than you make for the first year or two, and you may not always meet your sales targets – especially if you have a seasonal business.
Once you have your budget and know how much you will need to borrow, add a contingency on top for unexpected issues. Delays, problems with suppliers or simply not as much interest as you first thought, could all result in your start-up costing more than planned during the first few months of trading.

Are You Able to Gain Financial Support?

Throughout the UK there are a number of schemes available to help young entrepreneurs and start-up businesses gain finance. These are especially common in growing or required industries, such as exporting and technology, plus in certain areas of the UK which are trying to attract new businesses to locate there.

If you’d like to check if you’re eligible for any business finance, search the government finance finder tool here.

What Are Your Business Finance Options?

There are many types of funding available to start-ups, including:

• Angel finance – another individual invests their time, knowledge and experience at the early stages of a business.
• Bootstrapping – a business owner funds a new venture using personal finance or operating revenue.
• Business loans – a general bank or building society loan.
• Crowdfunding – a practice of business or project funding through large scale public contributions online.
• Peer lending – a form of borrowing between individuals through an online middleman.
• Small business grants – a non-repayable loan given to in-demand businesses.
• Venture capital – a form of funding which exchanges investment for equity in the company.

At Pure Property Finance we offer a number of other forms of funding which you may require within the early stages of your start-up, these are:

• Commercial mortgages – finance for the purchase of a business premises
• Invoice financing – a solution to cover the cost of unpaid invoices
• Bridging finance – short term finance, can be used while waiting for other investment to be approved
• Development finance – short term finance to cover the cost of developing a business premises
• Auction finance – for purchasing a business premises at auction

Start-Up Finance from Pure Property Finance

If you’re thinking of starting up your own business and need a short-term loan before your funding comes through, bridging finance may be able to help. Get in touch with our friendly experts to discuss your requirements today.

 

Article By Ben Lloyd

April 1st, 2016

Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.

Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.

Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.

Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.

See more articles by Ben

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