If you have a growing business, there’s an external finance option to match your ambition.
External finance is any funding you obtain from outside your business. It can come from friends and family, from a traditional bank or even from an investor.
On this page, we help you understand what external finance options are available and how they could help your business grow.
Equity and debt finance
Finance options can be grouped into two categories – equity and debt.
Equity finance is where a business sells shares to raise money. Debt finance is where a business borrows money from a lender, and then pays it back with interest.
Focus on finance options
There are numerous types of equity finance and debt finance. Here, we direct you to our dedicated pages on the different equity and debt products, so you can do your research and establish which might be best for your business.
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Finance finder tool
Use this quick and easy tool to find finance options for your business. Answer six simple questions and learn what types of investment may be most suitable for you.
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Everything you need to know about external finance
The good news for entrepreneurs is that there is a wealth of finance options out there to help grow a business. We answer some common questions, so you can make an informed decision about your funding future.
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How equity finance can transform your business
There can often be a lot of capital available to British businesses that are looking to take their next funding step. Read more about the impact equity finance can have.
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5 benefits of equity finance for growing businesses
Businesses want to grow for a variety of reasons – to invest in R&D, to enter new markets, or to refinance, for example. But why should they consider equity as an option to fund their growth plans? Find out the benefits of equity finance here.
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When it might be worth considering equity and debt
Equity or debt – it’s a choice many entrepreneurs face. And there are advantages to both. The right option for your business depends on a number of considerations. Learn more on this page.
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Regions and nations funding guide for smaller businesses
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Regional funding programmes aim to support smaller businesses across the UK's regions and devolved nations in areas such as early-stage development and capital.
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Reference to any organisation, business and event on this page does not constitute an endorsem*nt or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circ*mstances and, where appropriate, seek professional or specialist advice or support.
FAQs
Finance is a term broadly describing the study and system of money, investments, and other financial instruments. Finance can be divided broadly into three distinct categories: public finance, corporate finance, and personal finance. More recent subcategories of finance include social finance and behavioral finance.
What is the 50 30 20 rule? ›
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
What do you understand by financing? ›
What Is Financing? Financing is the process of providing funds for business activities, making purchases, or investing. Financial institutions, such as banks, are in the business of providing capital to businesses, consumers, and investors to help them achieve their goals.
How do I start understanding finance? ›
- Watch, Listen, or Read Up on Financial Topics.
- Take a Finance Course.
- Hit the Books Again.
- Talk to Financial Services Pros.
- Ready for More?
- An Evolving Industry.
- Where's the Best Place Online to Start Learning About Finance?
- What Areas of Finance Should I Learn About?
The real key to understanding finance is understanding the various pieces and the relationship to each other.
How can I understand finances better? ›
6 ways to improve your financial literacy
- Subscribe to financial newsletters. For free financial news in your inbox, try subscribing to financial newsletters from trusted sources. ...
- Listen to financial podcasts. ...
- Read personal finance books. ...
- Use social media. ...
- Keep a budget. ...
- Talk to a financial professional.
Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. When you are financially literate, you have the essential foundation for a smart relationship with money.
How to analyze your finances? ›
- Review Your Life Changes.
- Set or Reset Financial Goals.
- Sketch Out a Budget.
- Assess Your Debt.
- Check Your Credit Reports.
- Revisit Your Retirement Savings.
- Consider Your Other Savings Goals.
- Make Sure You're Properly Insured.
Financing allows for payments to be spread out over time, matching the financing term to the anticipated working life of the asset, making it more manageable and less of a financial burden. Another important factor to consider is opportunity cost.
What is finance explained simply? ›
Finance, of financing, is the process of raising funds or capital for any kind of expenditure. It is the process of channeling various funds in the form of credit, loans, or invested capital to those economic entities that most need them or can put them to the most productive use.
Financing Option means the election by the Seller to treat the assignment of a Purchased Asset as a pledge securing a loan by the Purchaser to the Seller.
What is your understanding of financial statements? ›
Financial statements are written records that illustrates the business activities and the financial performance of a company. In most cases they are audited to ensure accuracy for tax, financing, or investing purposes.
What is your understanding of personal finance? ›
According to Investopedia, “Personal finance defines all financial decisions and activities of an individual or household, including budgeting, insurance, mortgage planning, savings and retirement planning.” Understanding these terms can help you better control your funds and prepare for future financial success.
What is finance easily explained? ›
The term "finance" refers to financial activities that support the lives of individuals, businesses, and governments. Some of those activities include banking, borrowing, saving, and investing.
