There is a range of finance options, such as loans and investments, available to help businesses fund their growth. However, it’s essential to explore all your funding options and find the best funding for your business. Popular types of growth finance include:
Debt finance is one of the most common sources of funding for existing firms. Most debt finance takes the form of a loan that ultimately has to be repaid to the lender.
Business angel funding is a source of equity finance, which means that business angels invest their own money into a private company in return for a share of its ownership. Business angels look for opportunities to invest money in enterprises with the aim of making a reasonable financial return on their investment. Securing investment from business angels is one way of injecting capital into an enterprise when its owners cannot raise it themselves or via conventional loans.
Venture capital is a type of third-party equity investment that is used to fund business growth. Under a venture capital agreement, the business owner effectively sells the investor a stake in their company in return for finance. Venture capital funds typically invest in businesses with high-growth potential and a sound business model.
Crowdfunding is a method of raising finance that enables a large number of people or organisations to invest in a business or project. Investments range from minimal amounts of money up to millions of pounds. A business seeking investment is usually matched with potential investors online via specialist crowdfunding platforms.