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Accessing Business Finances for Start-Ups

Investors often want to see a proof of concept or past performance, and without them it can be difficult to secure finances to get your business rolling. However, there are options for start-ups to access financing without any track record. See below:

Angel investors:
Angel investors look for potential and invest their own money into a business in exchange for minority interest. They are often high net worth individuals who provide financial backing for small businesses in exchange for equity in the company. While the money is important, angel investors provide mentoring and valuable support for your business as well. There are multiple ways of finding angel investors:

  • Attend events: LCCI organises events surrounding access to finance
  • UKBAA (UK Business Angels Association): The UK Business Angels Association
  • AngelList: provides tools for startups and business owners to enable growth and accelerate innovations

Tips to access angel investments:

  1.  Develop a strong business plan: A solid business plan is a key requirement for attracting angel investors. It should clearly outline your business idea, target market, revenue model, financial projections, and growth strategy.
  2. Network with angel investors: Angel investors will look for a connection with you and your business. Attend local startup events, pitch competitions, and business conferences to network with potential angel investors. Reach out to angel investor groups, venture capital firms, and other startup organisations to learn about their investment criteria and processes.
  3. Prepare a strong pitch: A strong pitch can help you capture the attention of potential angel investors. Your pitch should highlight the unique aspects of your business, explain your growth potential, and clearly articulate how you plan to use the investment funds.
  4. Be prepared to negotiate: Angel investors will likely want to negotiate the terms of the investment, including the amount of equity they will receive and the timeline for repayment. Be prepared to negotiate these terms in a way that is fair and reasonable for both parties. Find out more.

Equity Crowdfunding
Equity crowdfunding is a method of raising capital by selling ownership of your business to a large amount of people through an online regulated platform, in return for investment. This method of raising capital can give businesses exposure to a large pool of investors which can help raise capital quicker than traditional fundraising methods. This is also an opportunity for investors to connect with likeminded businesses that share their values and interests. Businesses can engage in equity crowdfunding through a multitude of platforms. The most trusted ones are listed below:


  • Access to a wider pool of investors: WeFunder allows businesses to reach a broader audience of potential investors.
  • Support for small businesses: WeFunder is focused on helping small businesses and startups grow, providing tools, resources, and guidance to help entrepreneurs succeed.
  • Lower fees: WeFunder charges lower fees compared to traditional fundraising methods, such as venture capital or private equity.
  • Strong community engagement: WeFunder has a strong community of investors and entrepreneurs, who can provide support, feedback, and connections that can help businesses grow and succeed.


  • Access to capital: Crowdfunder allows businesses to tap into a large pool of potential investors, providing access to capital that may be difficult to obtain through traditional funding sources.
  • Increased visibility: By using Crowdfunder, businesses can showcase their products or services to a wide audience, which can increase brand visibility and help attract new customers.
  • Community building: Crowdfunder provides a platform for businesses to build a community of engaged investors who can provide support and guidance as the business grows.
  • Flexibility: Crowdfunder offers a range of funding options, including equity crowdfunding, revenue-based financing, and debt financing, allowing businesses to choose the option that best suits their needs.
  • Control: Crowdfunder allows businesses to maintain control over their company and decision-making processes, as opposed to giving up equity to a single investor or venture capitalist.


  • Access to a large network of investors: SeedInvest has a network of over 300,000 accredited investors, making it easier for startups to raise capital.
  • A rigorous selection process: SeedInvest only accepts a small percentage of startups that apply to its platform, which can help increase investor confidence in the quality of the companies listed.
  • Investor relations tools: SeedInvest provides tools and resources to help startups manage their investor relations, including reporting tools and communication platforms.
  • Legal and compliance support: SeedInvest provides legal and compliance support to ensure that startups comply with SEC regulations and other legal requirements.
  • Fair terms: SeedInvest helps startups set fair terms for their fundraising campaigns, which can help attract investors and build trust in the company.

Government-backed Loans: 
There are numerous loans out there that do not involve hard proof of assets or financial track records. The start-up loan provided by the British Business Bank is a government-backed loan of between £500 and £25,000, which allows entrepreneurs to either start their business or grow their already existing company. Find out more

Enterprise Finance Guarantee (EFG)
The Enterprise Finance Guarantee (EFG) is a government-backed loan guarantee scheme in the UK that aims to facilitate access to finance for SMEs by reducing the lender's risk.

  • Purpose and objectives: The EFG was introduced by the UK government to help viable SMEs that may have inadequate security or track record to obtain loans from lenders. Its primary objective is to encourage lenders to provide finance to SMEs that have viable business proposals but lack the necessary security typically required for conventional loans.
  • How the scheme works: Under the EFG, the government provides a partial guarantee to lenders (banks and other financial institutions) for up to 75% of the loan amount. The borrower remains fully liable for the debt, but the government guarantee reduces the lender's risk, making it more likely for SMEs to secure financing.
    The scheme covers term loans, overdrafts, invoice finance facilities, and asset finance facilities. Click for a high-level infographic of the EFG scheme.

  • Eligibility criteria: SMEs with an annual turnover of up to £41 million are generally eligible for the EFG. However, individual lenders may have additional criteria and specific requirements.
    Businesses from various sectors, including manufacturing, services, retail, and construction, can apply for EFG-supported financing. The borrower must have a viable business proposal and demonstrate the ability to repay the loan. Find here the limited number of further restrictions.

  • Loan terms: Loan amounts can range from £1,000 to £1.2 million, depending on the lender's assessment and the borrower's requirements. The repayment period may vary, but it generally ranges from 3 months to 10 years.

  • Application process: 

  1. SMEs interested in EFG-backed loans should approach one of the c.40 EFG accredited lenders with their proposal. These are participating lenders, including high street banks and specialist lenders, who have signed up to the scheme.
  2. The application process typically involves completing a loan application and providing supporting documents such as business plans, financial statements, and cash flow forecasts.
  3. The lender assesses the application and decides whether to grant the loan. If approved, the loan is subject to the EFG guarantee, and the borrower is responsible for repaying the debt.
  • Costs and fees: Borrowers are responsible for paying the full cost of the loan, including interest, fees, and charges determined by the lender. The lender may charge a guarantee fee to cover the costs associated with the EFG guarantee. The fee is typically a percentage of the loan amount.

  • Role of the government: The government operates the EFG scheme through the British Business Bank, a government-owned economic development bank. The government's role is to provide a guarantee to lenders, sharing the risk associated with lending to SMEs. The EFG is part of the government's wider initiatives to support small businesses and promote economic growth.

  • Advantages of the EFG

  1. Increased access to finance: the scheme helps SMEs access finance that may otherwise be unavailable due to lack of security or track record.
  2. Reduced lender risk: the government guarantee encourages lenders to provide financing to SMEs, as it reduces their risk exposure.
  • Limitations and considerations

  1. No direct funding: the EFG does not provide direct funding to SMEs but instead provides a guarantee to lenders.

  2. Availability and terms: loan availability and specific terms vary depending on the participating lender's policies and assessment criteria.
  3. Business viability: SMEs must have a viable business plan and demonstrate the ability to repay the loan, as the EFG does not guarantee success or profitability.
  4. Flexible loan options: EFG-supported loans cover various types of facilities, allowing SMEs to choose the financing option that suits their needs.