Small Business Funding Options Simply Explained

Words By: Drone Major

We set up Swoop to help businesses grow, and one question we hear again and again is “where can I get access to funding for my small business?”. 

In order to grow, your company is likely to face the need for additional capital, which can be obtained in one of three main ways: equity, debt, or grant. This blog aims to simply explain these options to enable you, as a small business owner in UK or Ireland, to make better decisions about your company’s financial future. 

Equity Finance for SMEs

Equity financing involves the sale of your company's shares, and giving a portion of the ownership of the company to investors in exchange for funds. The proportion of your company that will be sold depends on how much has been invested in the company, and what that investment is worth at the time of the financing. 

In the very early stages of business, the most likely route to equity funding is through Angel investment and those investing through the government’s SEIS scheme, whereby the government provides generous tax relief to investors wishing to support new businesses. If your business is a little more established, generally over two years old and you can show some level of success, you may find interest in EIS investors, venture funds, family offices, and tier one investment. The Swoop team can talk you through the pros and cons of all these options, and more.

We’ll go into more detail of each of these equity finance options on future blogs. For more detailed information on equity finance see Swoop’s guide to equity finance.

Debt Finance for SMEs

Debt finance is simply the term used for different ways of borrowing money or taking out loans. It is an arrangement between you and the lender to borrow a capital sum on the condition that it is paid back in full at a later date. Interest is accrued on the debt and paid independently of the capital repayment schedule. 

Unlike equity, debt does not involve relinquishing any share in ownership or control of your business. 

In the very early days there are startup loans available, and you may consider leasing or hire purchase. Beyond this stage there are numerous financing options available – peer to peer, invoice finance, crowd funding, IP funding, asset finance, and merchant finance, to name a few - the most suitable for your business will depend on a number of factors. Our experts here at Swoop can walk you through your options and ensure you are only put forward to the most appropriate providers. 

For more detailed information on debt finance see Swoop’s guide to small business loans.

Grants for SMEs

Small business grants, although not easy to win, remain one of the best sources of funding available to new, developing and established small businesses. The majority of business grants are funded by national, local or European government to; support key growth regions, stimulate technological advance through research and development, support our aging society, promote sustainability and clean growth, improve the future of mobility, and to make the economy (local and national level) more competitive in a specific sector. Overall these grant schemes generally seek to empower small and medium businesses to grow the economy and in the process, create jobs.

Grant offerings are opening and closing continuously, making it difficult to keep track, so Swoop’s platform provides constantly updated access to numerous grant providers. We also recognise the specific skills required to fill out grant applications, and provide an expert service in assistance with this. 

For more detailed information on grants see Swoop’s guide to small business grants.

Through a combination of our funding experience, our superior technology and our 1000+ providers, we can assess your needs quickly and match you to the right funding solution. If you’re ready to take your business to the next level then drop us a line and we’ll do the heavy lifting.

In order to get your company in front of your potential investors, our platform only requires you to fill in one super-form, and within a few minutes we’ll be able to assess and match you to suitable providers. On top of that, as your information changes and the market changes, we will update you in real time with funding solutions that best suit your business needs.