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DR AUDREY TANG

 Award-winning business author and broadcaster

Leadership trainer and coach

Keynote speaker

  • Audrey Tang

Guest Article: Keith Tully - Funding a start-up business – what are the finance options?


Founding a business and building a legacy is an ambition held by many, but in reality, breathing life into a start-up business can be challenging if you don’t have sufficient funds to fuel your plans. What finance options are available when funding a start-up business?


Fuelling a start-up

After firming the blueprints for your organisation, you’ll need to feed money into your plans to bring them to fruition. The first phase of investment will support the foundations of your business. From the material elements, such as a physical property to call your registered office address, to industrial machinery through which to manufacture products or a website to serve as an online shopfront - money will be required as essential fuel.

As your business grows and generates more profit, your access to finance will likely mirror this as your repayment ability increases. This will not only enable you to increase the scope of your plans, but also grow the business by bringing in new talent to drive it to new heights.


Finance options for start-ups

From traditional forms of finance, alternative finance to specialist business finance, there are a host of finance options available for businesses looking to fund a start-up business.


Family and friends - It’s a common first step to turn to family and friends to raise funds to launch a business. Either as a loan or an investment, borrowing from those closest to you can often be a cost effective and flexible way to access funds immediately.


Grants - Check what government grants are available for launching a start-up business.


Crowdfunding - Pitching your business through a crowdfunding platform to attract donations from supporters around the world is the definition of crowdfunding. From members of the public to professional investors, crowdfunding campaigns can attract a varied range of individuals. According to GoFundMe, there are three different types of crowdfunding.


Donation-based crowdfunding: People can support a cause by donating to it for nothing in return, such as raising money for a funeral.


Equity-based crowdfunding: The fundraiser accepts money from investors typically looking to help launch a business for equity in return.


Rewards-based: The fundraiser organiser provides a reward to donors, such as a product or service, in exchange for a contribution.


Business Loans - Loans for business come in many forms and can be tailored to different purposes. For example, asset finance to purchase assets, invoice finance to unlock cash tied up in invoices or bridging finance to cover a short-term gap while long-term credit is made available.


Investors and Venture Capital - Angel investors are high net worth individuals that use their own funds to invest in start-ups. Along with their money, angel investors offer their counsel, helping businesses throughout the early stages of growth.


If your start-up has extremely high potential, seeking funds from a dedicated investment fund through a venture capitalist may be the route for you.


The journey to funding a start-up business can be challenging, although there is a range of finance options available to help facilitate the launch of a business based on collateral, affordability, and loan use.


Author: Keith Tully of Real Business Rescue

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