How to Get Money to Start a Business in the UK: Funding Options for 2026

You can get money to start a business in the UK through personal savings, Start Up Loans, business grants, The King’s Trust, friends and family, crowdfunding, angel investors or customer pre-orders.

The right option depends on how much money you need, whether the business is already trading and whether you are comfortable taking on debt or giving away equity.

Before applying, calculate:

• Setup Costs: Equipment, stock, website and licences
• Operating Costs: Rent, insurance, software and marketing
• Working Capital: Money needed before sales become reliable
• Contingency: Extra funds for unexpected costs

The aim is to raise enough money to launch and operate safely without borrowing more than the business realistically needs.

Last Updated: 19.09.2026

How Much Money Do You Need to Start a Business?

Start by separating your costs into one-off expenses and ongoing expenses.

One-off costs may include equipment, website development, initial stock, licences, deposits, professional fees and branding. Ongoing costs can include rent, software subscriptions, insurance, advertising, utilities, stock replenishment and wages.

You should also consider working capital. This is the money required to keep the business operating while waiting for customers to pay or while sales are still developing.

For example, a business may need £8,000 to buy equipment and stock but another £4,000 to cover its first few months of operating costs. Applying for only £8,000 could leave the business short of cash shortly after launch.

Avoid automatically borrowing the maximum amount available. Your funding requirement should be based on realistic costs and cash-flow forecasts rather than the amount a lender is willing to offer.

Best Ways to Get Money to Start a Business in 2026

Personal Savings and Bootstrapping

Using personal savings can be one of the simplest ways to fund a small startup because there are no loan repayments, interest charges or investors to satisfy.

Bootstrapping means keeping outside funding to a minimum and growing the business using your own resources and revenue.

This could involve working from home, buying equipment gradually, keeping another source of income during the early stages or reinvesting profits into the business.

The main disadvantage is that your personal money is exposed if the business fails. Avoid investing money needed for essential household costs or emergency savings.

Government Start Up Loans

A government-backed Start Up Loan can help people who need more capital than they can provide themselves.

In 2026, eligible applicants can borrow between £500 and £25,000. The loan carries a fixed interest rate of 7.5% a year and can be repaid over one to five years.

There are no application or early repayment fees. Successful applicants can also receive up to 12 months of free mentoring.

Importantly, a Start Up Loan is an unsecured personal loan for business purposes, rather than borrowing taken out by the company itself. Applicants must pass a credit check and remain personally responsible for repayment.

Business Grants

Business grants can be attractive because eligible funding generally does not have to be repaid and usually does not require you to surrender ownership of your company.

However, there is no single grant available to every new business. Schemes may be restricted by location, sector, project type, business stage or founder circumstances.

Local authorities, regional programmes and specialist organisations can offer startup funding at different times.

Government funding databases also contain schemes covering areas such as innovation, manufacturing, environmental projects, technology and regional economic development.

Some grants also require the business to contribute part of the project cost, so check whether matched funding is required before applying.

The King’s Trust Funding

Entrepreneurs aged 18 to 30 may be able to access funding and business support through The King’s Trust Enterprise programme.

Eligible participants can access startup funding of up to £30,000, depending on eligibility, business viability and affordability. Funding is not guaranteed.

Current support includes access to a Test My Business Grant of up to £500, a startup grant of up to £5,000 and loan funding between £500 and £25,000.

The programme can also provide support with business planning, cash-flow planning, mentoring and post-launch support.

Applicants generally need to be aged 18 to 30, have the right to work in the UK, intend to operate the business in the UK and own or plan to own at least 50% of it.

Friends and Family Funding

Friends and relatives may be willing to provide a gift, loan or investment to help a new business launch.

This can provide flexible funding, but informal arrangements can create disagreements later. Clearly establish whether the money is a gift, loan or investment before accepting it.

For loans, agree the repayment period, interest if applicable and what happens if the business struggles. For investment, establish what ownership or rights the investor receives.

Putting the arrangement in writing can protect both the business owner and the person providing the money.

Crowdfunding

Crowdfunding allows a business to raise smaller amounts of money from a larger group of people.

Reward-based crowdfunding may offer products or other benefits to supporters. Equity crowdfunding involves investors receiving shares in the business.

Crowdfunding can also test market demand before a full product launch. However, a successful campaign generally requires marketing, an attractive proposition and an existing audience or a strong plan for reaching potential supporters.

Raising money is not guaranteed, and platform and transaction charges should be included in your calculations.

Angel Investors and Equity Finance

Angel investors use their own money to invest in early-stage businesses, usually in exchange for shares.

This type of finance may suit a scalable company with significant growth potential rather than a small business primarily intended to provide an income for its owner.

Investors commonly expect founders to know how much funding they need, how the money will be used, what market opportunity exists and how the company intends to grow. A clear pitch deck and realistic financial projections are therefore important.

Qualifying UK companies may also investigate schemes such as the Seed Enterprise Investment Scheme and Enterprise Investment Scheme.

SEIS can allow an eligible company to raise up to £250,000 while offering qualifying investors tax relief, although detailed conditions apply.

Customer Pre-Orders and Deposits

Some businesses can reduce their reliance on loans by receiving money from customers before all costs are incurred.

A product company could accept pre-orders before a manufacturing run, while some service businesses may request an agreed deposit before work begins.

Pre-orders can also provide evidence that customers are willing to pay for the product.

Businesses should make sure they can fulfil orders and comply with applicable consumer rights and refund obligations before spending money received in advance.

Other Business Finance Options

Businesses already receiving orders or building revenue may have additional choices.

Purchase-order finance can help businesses meet supplier costs when they have confirmed customer orders but lack the cash to fulfil them. Invoice finance can release money tied up in unpaid invoices, while asset finance can help spread the cost of business equipment.

These options generally become more relevant once a business has begun trading rather than at the idea stage.

Start Up Loan Rules, Interest Rates and Eligibility in 2026

Start Up Loans remain one of the most accessible structured funding routes for new UK businesses.

Applicants generally need to be at least 18 years old, live in the UK and have or plan to start a UK-based business. Existing businesses must have been fully trading for less than five years.

The current terms are:

Because the borrowing is personal, founders should check that repayments remain affordable even if the business takes longer than expected to become profitable.

How to Find Business Grants in the UK?

Business grants change regularly, so searching for funding should be treated as an ongoing process rather than a one-time task.

Look for programmes based on your location, sector, business stage and planned expenditure. A local grant could support equipment or premises, while an innovation programme could focus on research and development.

The government’s business finance support database includes national and regional programmes and allows businesses to explore different forms of finance and support.

Always read the eligibility rules before preparing an application. A strong application to an unsuitable scheme is unlikely to succeed.

Which Startup Funding Option Is Right for Your Business?

The best route depends heavily on the stage of the business.

Idea Stage: Personal savings, friends and family, selected grants and support programmes can be useful when the company has no trading history.

Pre-Revenue Stage: Start Up Loans, crowdfunding, angel investment, grants and pre-orders may become possible when there is a clear business plan and evidence of demand.

Early Trading Stage: Loans, angel investment, crowdfunding, grants and supplier arrangements may be available once the business has begun generating revenue.

Growth Stage: Businesses with established sales may gain access to a wider range of commercial loans, equity investment, asset finance, invoice finance and working-capital products.

Do not select finance purely because it is available. Consider repayment costs, personal risk, ownership dilution and whether the funding matches the purpose for which the money is needed.

How to Get Business Funding With No Trading History?

Having no accounts or previous sales can make conventional commercial borrowing more difficult because lenders often use historical performance when assessing risk.

However, a lack of trading history does not rule out funding completely.

Potential routes include Start Up Loans, angel investors, crowdfunding, customer-backed funding and some startup grants.

The British Business Bank specifically identifies angel investment, customer engagement and government-backed startup lending as options worth considering for businesses without an established track record.

When historical figures are unavailable, the quality of your business plan, market research, cash-flow forecast and evidence of customer demand becomes even more important.

What Do You Need Before Applying for Startup Funding?

Different lenders and investors ask for different information, but preparing your documents before applying can strengthen your position.

You may need:

• Business Plan: Explain what the business does, who its customers are and how it will make money
• Cash-Flow Forecast: Show expected income and expenditure over the coming months
• Startup Budget: Calculate how much money is required rather than requesting an approximate amount
• Use Of Funds: Explain exactly where the investment or loan will be spent
• Personal Budget: Check whether repayments remain affordable alongside household expenses
• Market Research: Demonstrate customer demand and knowledge of competing businesses
• Evidence Of Demand: Include relevant orders, enquiries, pre-orders or early sales where available
• Financial Projections: Provide realistic forecasts for sales, costs and profitability
• Pitch Deck: Prepare a clear presentation if you plan to approach equity investors

Business plans and financial information are particularly important when approaching lenders, while equity investors will generally expect a clear pitch explaining the market opportunity, team, finances and intended use of their investment.

How to Improve Your Chances of Getting Funding?

Be specific about how much money you need and why.

Saying that you need £15,000 for equipment, initial stock and three months of marketing is more credible than simply saying you want £15,000 to grow the business.

Your forecasts should also be realistic. Overstating expected sales can weaken an application if the assumptions cannot be supported by market research.

For investment, show why the business can grow and what makes it different. For loans, concentrate heavily on affordability and cash flow.

For grants, follow the scheme criteria closely. Grant applications are usually assessed against specific objectives, so a generic business pitch may not address what the funder is looking for.

Can You Combine Different Types of Startup Funding?

Yes. Many businesses use more than one source of money.

A founder might combine savings with a Start Up Loan, use a grant alongside their own capital or raise investment after initially bootstrapping the company.

Combining finance can reduce reliance on a single source, but always check the conditions attached to each funding arrangement. Some grants restrict which other funding can be used for the same costs.

You should also avoid creating a repayment burden that the business cannot comfortably support.

What Happens If Your Funding Application Is Refused?

A rejected application does not necessarily mean the business cannot obtain funding elsewhere.

Find out why the application was unsuccessful where possible. The issue could involve affordability, credit history, unrealistic forecasts, insufficient evidence of demand or applying to a scheme for which the business was not a strong fit.

Revisit your business plan and cash-flow forecast before immediately submitting another application.

You may also need to reduce the amount requested, build more evidence of customer demand, contribute more personal capital or choose a different form of finance.

Repeatedly applying for unsuitable credit products is rarely a good funding strategy.

Startup Funding Checklist for 2026

Before seeking money, make sure you understand your total startup costs, how much personal money you can safely contribute, how long the business may take to generate reliable revenue and how any repayments would affect cash flow.

Compare debt, grants and investment rather than assuming one option is automatically better. Check whether you qualify for national, regional, sector-specific or founder-specific support and prepare the required documents before beginning applications.

Most importantly, raise enough money to give the business a realistic chance of operating successfully without taking substantially more finance than it needs.

Conclusion

There are several ways to get money to start a business in the UK in 2026, ranging from personal savings and grants to Start Up Loans, crowdfunding and angel investment.

The right choice depends on your startup costs, business stage, personal finances, growth ambitions and willingness to take on debt or give away equity.

Start by calculating exactly how much money the business needs. Then compare suitable funding sources and prepare a realistic business plan, cash-flow forecast and explanation of how the money will be used.

A well-prepared funding application is generally stronger than simply applying to every loan or grant available.

FAQs

Can I Get Money to Start a Business With No Money?

Potentially. Grants, Start Up Loans, crowdfunding, The King’s Trust and investors may provide funding, depending on eligibility. Some businesses can also begin on a very small scale and reinvest early revenue.

Can I Get a Government Grant to Start a Business?

Startup grants are available through some national, regional and local programmes, but there is no universal UK startup grant. Eligibility can depend on location, sector, project and business stage.

How Much Can I Borrow Through a Start Up Loan?

Eligible applicants can currently borrow between £500 and £25,000 through the government-backed Start Up Loan scheme, with a fixed interest rate of 7.5% a year.

Can I Get Business Funding With Bad Credit?

It may be possible, but options can be more limited. Start Up Loan applicants must pass a credit check, while investors and some grants may focus more heavily on the business proposition and eligibility requirements.

Can I Get Funding Before My Business Starts Trading?

Yes. Some Start Up Loans, grants, The King’s Trust funding, crowdfunding and angel investment can be available before a business begins trading, provided the relevant criteria are met.

Do I Have to Repay Startup Business Grants?

Most genuine grants do not need to be repaid when all funding conditions are met. However, businesses should check the terms because money may need to be returned if grant conditions are breached.

What Is the Easiest Way to Fund a New Business?

There is no funding method that is easiest for every founder. Personal savings can involve less paperwork, while grants avoid normal loan repayments but are competitive. Loans may be more widely available but create repayment obligations.