Expanding and growing your business can be a daunting experience. Whatever field you work in, and whatever your specific aims, developing your business will need time, commitment, strategy, and funding. It’s this latter point that some businesses may struggle with, but there are a number of possible channels SMEs can turn to for financial help.

Before applying for funding, however, it is important for businesses to look at why they need funding, how much they need, and how this will help the long-term future of their enterprise. This information would ideally be detailed in a business plan, which some finance providers may ask for anyway to assess your application.

Because there are so many options available, including loans and investment, businesses should research into all possibilities before making a decision. The suitability of each provider will depend on your business history, how much finance you need, and the sector you work in, as well as the profile of the provider themselves.

Some of the lending options businesses may want to consider are listed below:


Government-funded loans

The government-owned British Business Bank works with partners and subsidiaries like the Start Up Loans Company to encourage the development and growth of SMEs. The Start Up Loans Company is specifically for new businesses that are up to 2 years old, with the potential to borrow up to £25,000, but there are many other finance options for more established SMEs too. Businesses don’t apply for funding directly from the British Business Bank, but through their varied selection of partners.



SMEs may also want to carry out some research into what government grants are available, both nationally and locally. Some regional councils may offer grants to businesses in their area, particularly if they are aiming to regenerate and diversify the local economy, and these would normally be listed on their website.

Grants may be particularly targeted at newer enterprises and certain industries, and will often have certain specifications over what the money can be used for. However, if a business is wanting a large sum, they should bear in mind that the grant may not cover it all so they may need to find further funding from other sources.


Alternative online lenders

The number of online lenders and peer-to-peer platforms has multiplied over the last few years, largely due to the rise in fintech and the introduction of changes like Open Banking. This particular development has enabled businesses to securely share their financial information, which means these lenders often have a relatively quick and easy application process.

Also, because they are able to digitally access the financial information of most businesses, online lenders can fully assess the transaction history of the SME and not just base their decision on a credit score. Digital lenders can offer a wide range of flexible finance products, and they may be particularly suitable for small businesses who are unable to secure a loan from a traditional banking lender.


High-street bank loan

This might be a good option for businesses that have been trading for a while, have capital, and have a good credit score. The traditional big-name banks are often able to offer sizeable business loans with a competitive interest rate, but their lending criteria is also fairly strict which some SMEs may not be able to meet.

Businesses would also need to put together a comprehensive plan showing how they would use the loan and make the repayments, as well as providing all the financial information the bank requests.


Invoice finance

This may be a possible way for businesses to release funds that are tied up in unpaid invoices, particularly if they are struggling to find funding from other sources. Rather than waiting until a customer pays an invoice before making any growth decisions or purchases, a business can sell it to a financier to access the funds instantly.

Of course, businesses will have to weigh up the benefits of getting the owed money instantly with the cost of using an invoice financier, but if it has specific growth goals that will be helped by an injection of cash, then this is a possible route to consider.


Asset finance

This form of funding can help businesses access equipment and other assets they may need, or release money from the assets they already own. There are several different asset financing options including: Hire Purchase (where you purchase an item and spread the cost over time), Equipment Leasing (where you rent equipment from a lender), and Asset Refinancing (where you take out a loan secured against the value of items owned by your business).

Depending on the stage of development the business is in, and the type of business you run, these asset finance options may help to facilitate further growth and expansion.



Going through a broker may help a small business find the right kind of loan for their circumstances. New SMEs especially may feel unsure what is the best choice for them, but a broker can offer advice and guidance and help a business secure funding. However, if they do use a broker, businesses should check what its fee structure is and what lenders it works with as this could affect their recommendations.

Pin It on Pinterest