Starting or growing a business is exciting, but expensive. And while loans are one way to get capital, they’re not the only option. If you’d rather avoid debt or simply can’t qualify for traditional financing, you’re not out of luck. There are other ways to fund your business that won’t tie you to monthly repayments or interest rates.
Some of them take more effort, others need creativity or patience. But if you’re smart about it, you can piece together what you need without taking on a loan. Here’s how.
1. Use Your Own Savings
Let’s start with the obvious one. If you’ve got money saved up, using a portion of it to fund your business makes sense. You’re not owing anyone, and you’ve got complete control.
But, and it’s a big but, you’ll want to be careful. Don’t throw in every penny you have. Keep a personal emergency fund aside, just in case things don’t go to plan.
Some people take this further by selling assets. Got an unused vehicle? Maybe some old tech or furniture collecting dust? These can bring in a few hundred or even thousands to get you off the ground.
2. Tap Into Friends and Family
This one can work well, but you’ve got to be clear and upfront. Mixing money and relationships can get tricky fast.
If someone close to you believes in your idea, they might be happy to support you. You could frame it as an investment or a gift. But write things down. Even if it’s your sibling, having a simple agreement in writing avoids awkward misunderstandings down the line.
Also, don’t pressure anyone. If they’re not comfortable, that’s okay. This option’s great, but only if both sides are 100 percent on board.
3. Try Crowdfunding
Sites like Crowdfunder, Kickstarter or Indiegogo let you raise small amounts of money from lots of people. It’s not just about the money, though. It’s also a chance to build a community around your idea.
To succeed, you’ll need a compelling story. People support businesses that resonate with them. Maybe your bakery uses local ingredients. Maybe your tech product helps people work smarter. Make sure you tell that story well.
Offer rewards or incentives if you can, maybe early access, discounts, or even just a thank-you note. And be active. Update your supporters, show progress, and keep the momentum going.
4. Look Into Grants
Yes, they exist, and no, they’re not just for scientists or charities. In the UK, there are business grants available for all kinds of sectors: tech, food, education, manufacturing, sustainability, and more.
Some are regional, others are national. You might need to meet certain criteria, like creating jobs, using green practices, or supporting the local economy.
They’re competitive, sure, but they’re worth the time. You don’t have to repay a grant, which makes it one of the best ways to fund your business without taking on risk.
Start by checking with your local council, Growth Hubs, or even the UK Government website. There’s a bit of paperwork involved, but if you’ve got a solid plan and can explain how you’ll use the funds, you’ve got a shot.
5. Consider Equity Investment
This one’s not for everyone, but it’s a valid route. Instead of borrowing money, you give away a share of your business in exchange for funding.
You might find an angel investor, someone with cash and experience who wants to support early-stage businesses. Or you could try pitching to a group of investors.
It means giving up some control, but in return, you’re not paying interest. And if your investor is experienced, they might bring advice, contacts, and insights you wouldn’t get otherwise.
Again, be clear on the terms. Know how much of your business you’re offering and what that investor expects in return.
6. Partner with Someone
Sometimes, two heads and two wallets are better than one. If you can find a business partner who shares your vision, they might be willing to split startup costs.
This works well if you bring different skills to the table. Say you’re great at sales and they’re great at finance. That kind of partnership can make your business stronger from day one.
But just like with friends and family, get everything in writing. Have clear agreements on roles, responsibilities, and shares. It’ll save you a lot of stress later.
7. Start Small and Grow Slowly
Not every business needs £10,000 to launch. You can start with a small, scrappy version of your idea. What some people call a “minimum viable product” or MVP.
Say you want to open a café. Maybe you start with a market stall or a coffee cart. Selling homemade skincare? Begin with small batches sold online.
As your business grows, the money it earns can be reinvested. It’s slower, sure. But it’s sustainable. And it keeps you in control.
In my experience, businesses that start this way often become more resilient. You learn what works, make small mistakes instead of big expensive ones, and build a loyal customer base from the start.
8. Use Pre-Sales
If you’re confident people want what you’re selling, you can sell it before it’s even made. That’s how some small brands launch new products.
It works like this. You promote your idea, take orders upfront, maybe at a discount, and use that money to produce the item.
It requires trust, of course. You’ve got to deliver, and ideally, give your early supporters something extra. But it’s a way to generate funds and test demand at the same time.
9. Apply for Competitions or Pitch Events
There are startup competitions, pitch nights, and innovation awards where winners get funding, mentoring, or even office space. You’ll usually need to pitch your idea in front of a panel. It can be nerve-wracking, but also great practice, and you might walk away with funding or useful contacts.
Check out organisations like Virgin StartUp, Enterprise Nation, or your local university’s enterprise programme. You might be surprised how many opportunities are out there.
