What Are Common Funding Sources for UK Start-Ups in 2020?

: Do you know what the common forms of funding are for start-ups in the UK in 2020? Find out more about some of these here in this article.

Though the coronavirus outbreak has caused a dip in the UK economy, now might be a good time for people to start up an independent business as corporate companies are making redundancies left, right and centre. However, with a recession on the horizon, it might be difficult for young entrepreneurs to obtain funding. All this being said, we strongly believe that new businesses can flourish despite the current climate. So, we’ve created this list of common funding sources for UK start-ups. Here’s how independent businesses will prosper in 2020:


Crowdfunding is becoming an increasingly popular and successful form of funding for small companies. People like to support small local businesses as opposed to big corporate organisations because this helps the community’s economy and sense of togetherness. This is especially true now with the global pandemic forcing many small businesses to shut down. So, go online and start a crowdfunding campaign for your start-up. This is also an excellent way to start advertising your brand, show people what the business is about, and put a face to the name. What’s more, crowdfunding is a cost-effective way to obtain funding as you don’t have to repay loans or donate a percentage of earnings to a third party.

Investors or Silent Partners

If your start-up business is quite ambitious, then to get going you will likely need to obtain more money than crowdfunding can provide. This is where attracting an investor or silent partner can be highly beneficial. These types of businesspeople will provide funding for your company in exchange for a percentage of the profits. Their involvement tends to be minimal, so your start-up will remain independent. Brands like Kohli Ventures are dedicated to being honourable investors who don’t leverage debt against others, so they’re the kind of entrepreneurs you need to be approaching. Before doing so, start-ups must get their business strategy in order and identify their unique selling point. Investors are looking to make a profit – if there’s nothing special or no potential for success in your business, then they won’t provide the funding.

Home Equity Loans

Borrowing against your home is a common source of funding for start-up businesses. The amount of funding they will receive depends on the value of the propertyand they’ll need to go through a lending institution before being approved for it. They can receive a sizable amount of funding this way though, plus the funds can be gradually repaid over time. What’s more, a start-up can remain independent this way.

Government Grant

The government also wants to see start-up businesses succeed because they significantly boost the local economy. Start-up businesses can apply for government grants in 2020. But once again it’s important to prepare a sustainable business plan. There’s a lot of competition in this area so this needs to be applied for well in advance.

These are the most common ways that start-ups in the UK obtain funding. Everyone wants to see local businesses to succeed and so are often willing to pitch in.

Author: Editorial Team

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