Match the finance to the need
The best startup finance depends on your stage, what the money's for, and whether you can offer security or want to keep full ownership. Many startups combine sources. Here are the main options and who each suits.
1. Government-backed Start Up Loan
A government-backed personal loan for new businesses, with fixed rates and free mentoring. Best for early-stage founders who want accessible, unsecured funding and support. Per-founder limits apply, and multiple founders can each apply.
2. Business grants
Non-repayable funding from government, councils and organisations for specific sectors, regions or activities (e.g. innovation, green tech). Best for eligible startups — free money, but competitive and often restricted to particular uses. Worth researching local and sector schemes.
3. Asset finance
Spreads the cost of equipment, vehicles or machinery, secured against the asset itself. Best for startups needing kit without a big upfront outlay — the asset is the security, so it's accessible early on.
4. Invoice finance
Advances cash against unpaid invoices, smoothing cash flow. Best for B2B startups with creditworthy customers but slow payment terms — it unlocks money you're already owed.
5. Equity investment
Angel investors or venture capital provide funding in exchange for a stake. Best for high-growth startups needing larger sums and willing to give up some ownership for capital and expertise. SEIS/EIS schemes can make this attractive to investors.
Which is best for you?
- Early-stage, want support: government-backed Start Up Loan
- Eligible for free funding: grants
- Need equipment: asset finance
- Slow-paying B2B customers: invoice finance
- High growth, need big capital: equity investment
How to find the best startup finance
A business finance specialist can match your stage and need to the right funding mix and lenders. Find a business finance specialist through Nesto — free, no obligation.
Frequently asked questions
What's the easiest finance for a new business?
The government-backed Start Up Loan is among the most accessible for early-stage founders, with fixed rates and free mentoring.
Can startups get grants?
Yes — government, council and sector grants exist, though they're competitive and often restricted to specific uses or regions.
What is invoice finance?
It advances cash against your unpaid invoices, improving cash flow for B2B businesses with slow-paying customers.
Should I give up equity?
Equity suits high-growth startups needing large sums and expertise, but you give up ownership. Debt keeps control — weigh both.
Can I combine funding sources?
Yes — many startups mix a Start Up Loan, grants and asset finance as they grow. A specialist can help structure it.