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Finance options for startups and SMEs, explained

Finance options for startups and SMEs, explained

British Business Bank

3 min read Partner content

A new 'Business Finance Guide' produced by the British Business Bank and ICAEW lays out options for startups and SMEs, and explains how important the information is in the current financial climate.


In the current climate, it is even more vital that smaller UK businesses understand and have confidence in the growing choice of finance available to help them succeed.

With thousands of start-ups and SMEs turning to online platforms to raise finance, an unprecedented coalition of major UK business and finance trade organisations have launched a new digital guide on different sources of investment, lending and professional advice.

Led by the British Business Bank and the ICAEW, an impressive 23 bodies from across the business and finance sectors have contributed content to and agreed to distribute the new Business Finance Guide – a journey from start-up to growth.

The Business Finance Guide builds on the success of a 2014 printed version that reached three quarters of a million companies, entrepreneurs, investors and advisers.

Available for free in digital, downloadable pdf and hard copy form, the new guide impartially sets out the main things to consider and outlines sources of finance available to businesses – ranging from start-ups to SMEs and growing mid-sized companies.

It features tools and ideas, as well as expert videos, to help businesses consider their options, make decisions and plan how they will finance expansion.

Why the Business Finance Guide is needed

The market for smaller business finance in the UK is dominated by the four largest banks, between them accounting for around 80% of small business loans. British Business Bank research also shows that over half of UK smaller businesses go only to their main bank and do not shop around for finance.

Although this might not appear, on the face of it, to be a major issue, bank finance may not be the most suitable form of finance for these businesses. Furthermore, the same research finds that around half of those businesses rejected for a bank loan will simply stop looking at that point, meaning potential expansion opportunities are missed and new jobs remain uncreated, with an adverse knock-on effect for UK economic growth.

At the launch of the Business Finance Guide Keith Morgan, CEO of British Business Bank, said, “A growing number of finance options have become more established, mainstream and accessible to smaller businesses over recent years, and building their awareness and understanding of those options is a key aim for the British Business Bank.

“That’s why we are delighted to be publishing this new edition of the Business Finance Guide, both in hardcopy and digital versions. We view it as an essential starting point for businesses in finding the most suitable finance for their circumstances and plans to enable them to grow and thrive.”

Michael Izza, Chief Executive, ICAEW, added, “Businesses need certainty and that also applies to when they are raising finance. We want businesses to come out of the dark and have their most powerful tool to grow – information and advice.

“Getting the right advice is crucial, especially as the landscape and sources of finances has changed so significantly.”

The British Business Bank’s mission is to makes finance markets for smaller businesses work more effectively, allowing those businesses to prosper, grow and build UK economic activity. As well as increasing both supply and diversity of finance for UK SMEs through its programmes, it focuses on raising their awareness and confidence in the choices available in the marketplace, enabling them to thrive and grow.

In uncertain times, it becomes even more important that the UK’s SMEs can get trusted, reliable, impartial information about their finance options.

Businesses, and those who advise them, can access the Business Finance Guide for free here.

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