How to Gain Capital to Start a Business

Starting your own business? Deciding to take the road less travelled and pursue your own success isn’t an easy choice to make. Yet if you have an idea that can be monetised and made to generate a profit, why not take the next step and explore where it may lead? After all, nothing ever worth doing was easy. However, passion and commitment can only take you so far. So as well as researching and developing an effective strategy to get the ball rolling, you also need access to enough capital to start up. But, rather than fall at the first hurdle like so many other UK startups, know that there are a variety of ways to generate capital for a new business. It’s just a matter of being prepared and knowing where to look.

How to get capital to start a business

Starting your own business can be a daunting task to undertake, especially if you have little or no capital available. But just because you’re having to manage with a restricting budget doesn’t necessarily mean you can‘t go and achieve your vision. If you have a business plan and are willing to put in the hard work, there are funding opportunities available designed specifically for new businesses.  

Grants

Grants are a great way of gaining access to cash for your business which usually doesn’t need to be repaid. Such schemes are usually offered by Government/Local Authorities, Corporate Entities, Growth Hubs, Sector Specific Organisations and Private Individuals, with each imposing different sets of terms and conditions. This is why you need to check the purpose of each scheme, how much capital you could receive and whether you’re eligible in the first place in order to avoid wasting your time. Plus, you may also be required to match any funding you receive using your own capital.

Thinking about starting a new business? Need help gaining access to additional funds? Apply for New Business Finance or learn more about how your business could benefit.

Crowdfunding

Another way of supporting the development of a new business is through Crowdfunding. This is a scheme that involves reaching out to investors online and managing a fundraising campaign (articles, blogs, videos and/or online discussion) encouraging 3rd parties to invest based upon the viability of your business. Though there are no limits restricting how much capital you may generate this way, anything that you do receive will come at the cost of equity in your business. As such, anyone who chooses to invest will gain a shareholding and may have an influence over how your business is run.

Peer-to-Peer Lending

If you’d rather not give away shares to 3rd parties you could, instead, raise capital for a new business by applying for Peer-to-Peer Lending (Loan-Based Crowdfunding). Like crowdfunding, you’re also required to appeal directly to 3rd party investors but, instead of giving away shares, the key difference is that investors will join a panel and pool their funds together in order to offer you a short-term loan which is gradually repaid using a Fixed Monthly Repayment Scheme, plus interest.

Taking your business to the next level?

As your business continues to develop, it’s vital that you remain on the lookout for any potential opportunities to take it to the next level. That’s because, as you continue to trade goods and/or services with your customers, you’ll be building up a trading history. On reaching your 2nd trading year, further external funding opportunities may become available. This includes products on offer through the Alternative Finance industry such as Secured Business Loans, Merchant Cash Advance, Overdraft Replacement and Asset Refinance. The only obstacle to overcome now is deciding on which product is most suitable for your business’ needs and plans for the future, which is where we can help.

At Rangewell, we’re an Access to Finance specialist working with over 350 lenders to offer you a comprehensive overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process from start to drawdown. So if you’re unsure about how to raise capital for your startup business, apply for New Business Finance today or find out more with Rangewell.