Planning ahead as a start-up is never an easy task, but forecasting for the future is among the most important disciplines in the early stages of growing a business – if not the most important of all. As much as we’d like to stand on our own two feet, financing your professional endeavour with additional funding is a route most entrepreneurs will have to pursue at some point – whether now or in 5 years’ time.

Understanding how to secure those much-needed funds can be a minefield, with conflicting advice and hidden drawbacks around every corner. It therefore pays to take due diligence when you’re on the hunt for cash – and in today’s article, we’re exploring five ways to secure funding for your start-up this year so that you can make the decision that’s right for your company.

Consider those closest to you

When exploring available avenues as you look for funding, it’s easy to have the blinders on and fail to consider the opportunities around you – literally. Friends and family can serve as a credible source of capital, and offer an easier way to secure vital funding than the often drawn-out processes involved with securing a bank loan. When comparing the level of funds you’ll secure for investment against venture capitalists and banks, friends and family don’t fare quite as well – but in the very early stages of a start-up, even a small amount of cash can make a world of difference – helping you to build your business’s website or commission your company branding, for example.

It’s worth noting that caution should be taken when accepting funding from friends or family, as the extremely personal connection creates additional responsibility to honour the agreement – or you may risk placing strain on the relationship, whatever that may be.

Look into loans

One of the more traditional approaches to securing start-up funds, loans can offer a relatively easy and straightforward means of accessing the necessary cash. Banks can still be wary of parting with cash in today’s economic climate, and the process for securing a bank loan can be arduous and painful – while a business or personal loan provides a quicker way to borrow the money you need without the long delay. Personal loans of up to £25,000 offer an efficient and effective solution to generating money that can be invested into a business – and these kinds of funds can have a considerable impact in the early days of entrepreneurship.

Scout out existing schemes

In the early stages of your mission to find funding, it’s worth looking at the numerous UK and EU-led schemes currently open to SMEs. There are several schemes aimed at supporting small businesses across a number of sectors, with some of these including grants that have zero repayable debt – so it’s worth exploring this option as an interest-free way to secure early-stage funding. A two-part application process usually involves an initial Expression of Interest (EOI), followed by diligent checks where business plans, projections, feasibility and market research are analysed. You may also be required to deliver presentations, where you’ll be tasked with persuading the schemes that your proposal is viable, thought-out and in line with their guidelines.

If all of that sounds a little daunting, there are regional growth hubs led by LEPs (Local Enterprise Partnerships) that offer advice and can support you with the preparation of funding applications through free or funded channels – so we’d recommend reaching out to yours if you’re considering going down this route.

Join an accelerator or incubator

An increasingly popular go-to for small businesses, accelerators and incubators focus on supporting and funding SMEs. Accelerators are short-term, fast-growth solutions to funding – generally offering anywhere between £20,000 and £30,000 in return for a fixed equity stake of 5-10%. In a highly competitive landscape, accelerators are offering additional incentives to attract small businesses to sign up, including shared office space, 1-2-1 training, meeting facilities and access to experienced business networks – all of which offer a major advantage for start-ups.

The key difference between accelerators and incubators is that, while accelerators focus on fast growth and expansion, incubators are more drawn to medium-term sponsored innovation. Incubators are often created with a community spirit, offering coworking space on a month-by-month basis, events space and meeting facilities to those accepted. Usually dedicated to a specific industry or niche, incubators give start-ups an opportunity to gain access to like-minded businesses, networks of angel investors and a creative place to develop their ideas.

Being accepted into an accelerator or incubator can be beneficial in the long term too – as venture capitalists will find it particularly appealing that your business was accepted, and therefore trusted, by one of the firms.

Launch a crowdfunding campaign

While crowdfunding in itself is not new, going digital with this cash-raising concept has enabled crowdfunding to rocket into the global market over the past decade. Last year, Britain’s leading crowdfunding platform, CrowdCube, passed its £200 million fundraising milestone since its inception in 2011 – so it’s clear that UK businesses are now seeing this avenue as a legitimate way to generate the investment they need.

Turning traditional fundraising models on their head, crowdfunding platforms have allowed SMEs across the globe to tap into funds from stakeholders in the wider community – including customers, present and future. Another element differentiating crowdfunding from other fundraising models is that the return on investment offered to investors is highly interchangeable, with campaigners able to offer anything from merchandise or tickets to a showcase, through to an equity stake in the company – an appealing prospect to businesses of every budget.

As a start-up, it’s likely that you’ll juggle every aspect of your business in the beginning – and raising funds is no different. Although there are many different ways to secure a cash injection, each one comes with its unique pros and cons to be considered before opting in. We’d highly advise any start-up searching for funds to conduct thorough research and due diligence, so that you can find the right fit for your business.

Amanda Gillam is a content writer at Solution Loans.