How to Finance Your Business Start-Up

Who Will Benefit From This Guide?

If you’re dreaming of starting a business in the UK—whether it’s a small shop, tech startup, or service company—this guide is for you. Maybe you’ve got a big idea but aren’t sure how to make the money side work. Don’t worry. We’ll walk through everything together, no matter your level of finance know-how.

What Does “Financing Your Business Start-Up” Mean?

Let’s keep it simple: “Financing your business” just means finding the money you need to get your idea off the ground. This could mean buying stock, kitting out an office, or covering your early running costs. The goal? Start strong and keep your momentum going.

Why Getting Your Start-Up Finances Right Matters

• Sets you up for long-term success: Making smart choices now can mean less money stress later.
• Helps you focus on growth: With the right funding, you can devote more energy to building your business and less to worrying about keeping the lights on.
• Opens more opportunities: Some sources of finance come with perks, like mentoring or new connections.

Getting this step right gives your business the best chance to thrive.

How the Financing Process Works (No Jargon)

Let’s break it down:

1. Figure Out How Much You Need

• Make a list: what are your must-haves vs nice-to-haves?
• Factor in one-off costs (like equipment) and ongoing ones (like rent or salaries).

2. Explore Funding Options - Your own savings

• Loans (from a bank or finance broker like Kandoo)
• Support from friends or family
• Investment from outside (angel investors or venture capital)
• Government grants or schemes

3. Compare Your Choices - What are the costs? (Interest, repayments)

• How quickly can you access the money?
• Any strings attached?

4. Apply and Secure the Funding - Pull your documents together (business plan, proof of identity, etc)

• Apply through the right channels (each funding route has its own process)
• Wait for approval—and celebrate!

Let’s Look at a Real-Life Example

Meet Aisha in Manchester. She wanted to open a vegan café. Here’s how she handled the finances:

• Budgeted £20,000 for equipment, stock, and initial hiring.
• Put in £5,000 of her own savings.
• Applied for a small business loan through a finance broker—secured £10,000.
• Got family to invest another £5,000 in return for a share in the business.

She opened her doors, kept careful track of her spending, and was able to repay her loan within two years. You could do the same!

Jargon Buster: Key Terms Explained

TermWhat It Means in Plain EnglishEquityGiving up a share of your business for moneyLoanBorrowed money you repay with interestAngel InvestorA private individual who invests in startupsBusiness PlanYour roadmap—what you’ll do and whyGrantFree money you don’t have to pay back

Frequently Asked Questions

What’s the easiest way to finance a start-up?

There’s no one-size-fits-all answer! For many, it’s a mix of savings and loans. Chatting with a broker can help you figure out what suits you best.

Do I need a business plan to get funding?

Most lenders and investors will ask for one. It doesn’t have to be fancy, just clear and honest.

Are there special loans for UK start-ups?

Yes—many banks, brokers like Kandoo, and the UK government have start-up loans and support schemes.

Can I get funding if I have a poor credit score?

Some options are still available. Brokers can help you explore alternative lenders or loan types.

Ready to Get Started?

You don’t need to have it all figured out. If you’re keen to explore your funding options, why not have a quick chat with a finance expert? At Kandoo, we connect you with a range of start-up finance solutions tailored to your needs. Your dream business could be closer than you think!