No money, no problem – 10 sources to find the right funding for your business even when the banks say no

Business funding
In spite of that, it’s still the most common form of borrowing for businesses. In fact, over a quarter of SMEs approach their bank manager for a loan at some stage or another with credit card borrowing almost as popular a choice.
However, for those that have been turned down by the bank, or don’t feel a bank loan is the most appropriate source, there are plenty of other ways to drum up money and help your business flourish.
The 10 alternative ways to fund your business:

Business Angels

Business Angels are wealthy entrepreneurs that are actively seeking people with dynamic business ideas to invest in. They’ll want something in return, which is normally a share of the business. However, you’ll not only benefit from their investment, you’ll also get to reap the rewards of their experience. A company like Angel’s Den is a good port of call.

Venture Capital

If you need serious investment (£500k plus) then venture capital financing is the answer. This option is best suited for those who are primed for rapid growth, and don’t just need a cash-injection to get moving. However, don’t expect to get a huge lump sum upfront. Generally speaking, VC funding comes in instalments to help manage growth effectively. You can also expect to give away a substantial portion of the business – but in return, you’ll get significant help to scale-up with impact.


Crowdfunding is a recent phenomenon, which involves asking the public to invest specified amounts of money in your business, usually in return for something – equity (for this, see sites like CrowdCube) or rewards (a gift of some sort, offered on sites like Kickstarter). Do it well, and you’ll swiftly raise the money you need without spending too much in the process.
However, it’s not as easy as it looks, and in today’s competitive market, you’ll need to make sure your business idea stands out online, and put a lot in in terms of PR and social media time and effort.

Peer to peer lending

Most Peer to peer lenders are private individuals investing in a range of different business ideas. They run via sites with some operating on an auction basis, which means, after completing an initial assessment, you can select a lender, based on a rate of interest and loan period. However, you’ll need a good financial history, and if you’re a new company, you might be considered ‘higher risk’, which will mean higher interest rates.

Asset financing

Secure your loan against your capital assets and gain money quickly for your business. The downside is clear here. Fail to pay it back in the specified time, and your assets are seized by way of payment. However, if you’re confident that you can fulfil the terms of the loan, it’s a good way to get your mitts on the money you need.

Invoice finance

You can raise cash against future invoice payments from your customers. This comes in handy if you need to cough-up cash for the suppliers before being paid by your clients. However, this type of financing isn’t often available to those who sell direct to the general public. Likewise, if your clients don’t pay – you’ll have to shoulder the costs, plus interest.

Cash advance 

The business equivalent of payday lending. This is is a high-risk option, and only suitable if you need the money fast, and know you can pay it back quickly. Otherwise, be warned, interest rates are eye-wateringly high. However, it’s one of the quickest ways to get your hands on money for your company.

Pension-led funding

If the banks have turned you down, but you have a sizeable pension fund, this is a good way of getting your hands on a commercial loan. It’s a simple concept – you secure your loan against your pension. However, the loan can’t exceed 50 per cent of your total pension fund, which in some cases, may not be enough for what you need.

Business grants

Fancy getting some money without having to pay it back? That’s essentially what a business grant is – and they tend to be allocated by governmental bodies, public institutions and other similar organisations. Don’t make the mistake of thinking ‘free’ equals ‘easy’. On the contrary. Every business wants to get their hands on these coveted grants, so competition is fierce and you’ll have to work hard to ensure your pitch stands out.

Accelerators and Incubators

Both Accelerators and Incubators are there to give you the benefit of their expertise, support and mentorship – and they’ll also be able to point you in the right direction for financial support within their impressive network of investors. You’ll probably need to pay a fee or give them some equity to secure their help, but it may work out advantageously in the long-run.
If you want to swot up on exactly what options are available to you, book your free tickets for the Business Funding Showin February 2016. It’s the UK’s first exhibition aimed solely at people like you – business owners looking for ways to kick-start their business, without having to beg bank managers for money! You can find out more at