The finance options available for starting a new business or startup

The finance options available for starting a new business

There’s never been a better time to start a new business. Last year we saw 774,420 new companies launch right here in the UK. That’s up 3.5% from 2021 and is 19% higher than just five years ago.

Starting your own business is a very large (but very rewarding) challenge that’s well worth undertaking. It’s also well worth starting to think about all of the financial options available to you, so that you don’t exhaust your cash flow too early, and to make sure that you’re well prepared for any bumps that you might face down the road. 

One of the main hurdles entrepreneurs face is getting enough cash together to pay for the initial costs. Less than half of UK startups survive beyond their first five years, with the records showing that insufficient financing is the main reason for business failure among startups in 2022. 

Virtually every business needs some level of finance to get going. Whether it’s for buying equipment, office space, or marketing, the costs for starting up a great business can really add up. And that can even be before your business has gotten off the ground. 

Once you get going, you’ll also have to think about your ongoing cashflow to make sure that you’re agile enough to overcome any obstacles that crop up while you’re growing and building your financial stability.

Fortunately, there are several funding options out there to help you get your business up and running to the best possible start.

What are common options for financing new businesses or startups?

Some of the most common sources for financing new businesses or startups include:

  • Equipment finance
  • Fit out finance
  • Business loans
  • Invoice financing
  • Vehicle finance

Each of these financing solutions caters to different needs and aspects of a new business, from purchasing the necessary equipment to setting up a physical location, managing cash flow, and acquiring vehicles for operations. Below, we explain each of these financing options.

Equipment finance 

All tech firms need computers, as restaurants need ovens and manufacturers need machinery. As such, equipment finance is an obvious choice for starter businesses that need to buy equipment that’s essential to their operation to get going (without having to fork out on an initial heft investment).

And it’s not just for “tangible” assets like computers and desks, or tables and chairs – it also cover “intangible” assets like software, signage or even AstroTurf so don’t be afraid to enquire about equipment financing even if your business has some unique needs.

Fit out finance 

When setting up a new physical location, fit-outs can be a big expense (even fit outs for small units can be pricey). Fit out finance helps new businesses by funding construction and renovation through monthly repayments as opposed to one big upfront payment – making things a bit more manageable. Like equipment finance, it covers both tangible and intangible items, making it a great option for a variety of business types, like shops, gyms and offices.

Business loans

Business loans are a go-to option for emerging businesses who are looking for a bit of flexibility with their funding. The money can be used for various things, from covering working capital and deposits to funding management buy-outs and acquisitions.

Invoice financing 

Invoice financing essentially turns outstanding invoices into immediate capital. 

Instead of waiting for clients to pay their invoices— which can take weeks or even months— a business can access a significant percentage of the money that’s owed. 

Sometimes this can provide a new business with a lifeline, but it also gives a bit of financial stability generally and is therefore an option for helping to navigate the unpredictable early stages of entrepreneurship.

Vehicle finance 

Vehicle finance, or commercial vehicle finance, allows businesses to purchase cars, buses, taxis, vans, etc – all of which generally have a large initial upfront payment.

Whether it’s for delivery services, employee transportation, or simply a company car, vehicle finance lets businesses acquire the vehicles needed for running their operations.

How Origin Finance can help 

Starting a finance business can seem daunting, but it’s entirely achievable with the right financing options and support.

Here at Origin Finance, we’d love to support your new business venture. If you let us know what you’re looking to finance, we can help you to find the most suitable funding solution. As we work with over 120 lenders, each specialising in different industries, we’re able to find the most competitive finance products for your new business.

And our team won’t just look at your numbers; we want to understand the people and the ideas behind your business to learn more about what you do and why you do it. We have proven that a compelling business story will significantly increase your chances of securing business finance.

We also offer flexible payment terms, including seasonal payments for seasonal businesses, and the ability to spread VAT throughout the finance period. In addition, our partnerships allow us to provide finance for new, used, or refurbished equipment, with no deposit required in many cases.

Find out about our turn-key new start finance solution, or get in touch for a free no-obligation quote without affecting your credit score.

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