An overview of the main ways UK companies fund themselves, what each one costs you and when it makes sense.
Debt suits businesses with steady, predictable income. You keep full ownership, but repayments come first, whatever your trading looks like.
Fixed sums repaid over a set term. Usually needs trading history and sometimes security or a personal guarantee.
Flexible short term borrowing to smooth cash flow. Convenient but often more expensive over time.
Leasing or hire purchase for vehicles, equipment and machinery, secured on the asset itself.
Unlock cash tied up in unpaid invoices through factoring or invoice discounting.
Equity investors take ownership in exchange for capital. There are no repayments, but you share future value and often decision making.
Often the first cheque. Keep it formal with proper paperwork to protect relationships.
Experienced individuals investing their own money, frequently via SEIS or EIS, often bringing mentoring too.
Funds backing high growth companies with larger rounds, expecting rapid scale and a clear exit.
Larger investments in established, profitable companies, often taking a majority stake.
Grants do not need repaying and cost no equity, but they are competitive and usually tied to specific outcomes such as innovation, jobs or regional growth.
Alternative lenders and platforms have filled gaps left by traditional banks, often with faster decisions and more flexible criteria.
| Option | Typical stage | Ownership | Repayment | Best for |
|---|---|---|---|---|
| Bank loan | Established | Retained | Fixed, with interest | Predictable cash flow |
| Grant | Any | Retained | None | Innovation or specific projects |
| Angel investment | Pre seed to seed | Shared | None | Early product and traction |
| Crowdfunding | Seed to growth | Shared | None | Consumer brands with a community |
| Venture capital | Seed to growth | Shared | None | Rapid, scalable growth |
| Revenue based finance | Growth | Retained | Share of revenue | Recurring revenue businesses |
| Private equity | Mature | Often majority | None | Buyouts and expansion |
Our step by step guide walks through preparing for investment, from business plan to completion.
Read the investment guide