Choose the right finance when starting a business

The type of financing you choose will depend on your business type, the amount of money you need, and how you plan to use it. These factors are essential in selecting the best financing option for your business.

Take into account the following finance options for new businesses.

Personal savings and borrowings

Using your own savings or personal borrowings can be helpful. This is especially true if you can't get external finance. See advantages and disadvantages of using your own money to start a business.

Family or friends financing

Borrowing money from family or friends should be approached carefully. You should consider the risk that they could lose their money if your business doesn’t succeed. See financing from friends and family.

Bank financing

Banks provide a range of finance options for new businesses, including: 

• business loans for long-term funding or equipment purchases
• overdrafts to manage daily cash flow. To qualify, you’ll need a credible business plan and may need to offer security or collateral. 

See bank finance options available for businesses.

Investor funding

Selling shares to business angels or venture capitalists can attract outside investors. They provide short-term finance without the need for repayment. It can also bring in expertise along with funding. However, it usually means giving up shares in your business. Investors may want control over its management. Explore shares and shareholders and equity finance.

Grants and government support

There are various grants and government-backed schemes designed to support new businesses. These often come with low-cost finance and business advice but are competitive and have eligibility criteria. Find out about available grants and government support.

Commercial lenders

Consider options from insurance companies or building societies. They often offer good terms and have less strict conditions than traditional banks. You may get a better deal - eg lower interest rates - and they are generally less restrictive.

Crowdfunding

Raising funds through crowdfunding platforms means getting money by asking many people for a small investment in your business. Learn more about crowdfunding for start-ups.

Other sources of business finance

You can seek finance from other areas, like a community development finance institution. This can work if your business only needs a little funding. Or, if you are setting up in a deprived area or a sector not covered by banks or other lenders. See other sources of business finance.

Most businesses use a mixture of finance sources. For example, you might invest your own money to cover market research. You would borrow from the bank to buy equipment and machinery. 

For further information see business financing options - an overview.

Business support finder

The Northern Ireland business support finder is a searchable database that can help you find publicly-funded and not-for-profit sources of business assistance you may be eligible to apply for. Support may be available in a number of forms, including financial assistance and free or subsidised advice services.

See financing your business: the options to watch a video that outlines business finance options that may be available to you.