2020 has changed the job market – with thousands turning away from their 9-5 in search of a more fulfilling career. For a substantial number of people, starting a shop or online business would be the ideal next step. Self-employment has grown increasingly attractive as the Coronavirus pandemic has shown the workforce that there’s a life away from the office – but getting started isn’t always so easy as just deciding that you want to go into retail.

Among the many challenges faced by every small business owner, financing your plans can tough. Regardless of what you’re selling you’ll need money to invest in inventory stock, delivery fees and website hosting, not to mention the additional costs of maintaining physical premises if you have them.


If you don’t have a source of private funding, it might be harder to get your business off the ground – but that doesn’t mean you should give up. There are plenty of ways to raise the finances needed to start a small retail business, you just need to know where to look.

With this in mind, here are four of the most effective ways to raise capital for your entrepreneurial aspirations.

1. Crowdfund your business

Ever heard of the Oculus Rift? How about the PopSocket? Well, the chances are that you’ll have come across them if you’ve ever browsed the web for virtual reality gaming or even just mobile phone accessories.

These two companies are now worth tens to hundreds of millions, yet they started out on crowdfunding platforms. Here they raised money from people who were interested in the concept they’d come up with, and started to make their dreams a reality without having to give up a significant stake in their fledgling businesses.

There are lots of crowdfunding platforms out there, but the general premise for each is the same. You’ll get the chance to pitch your product to like-minded people, in the hope that they will chip in to launch your business. You won’t usually have to give them a slice of the equity or control in your company – since most crowdfunding campaigns offer discounts or freebies to funders when they get up and running.

Crowdfunding is worth considering, particularly if you have a new or novel business idea. You’ll just need a strong pitch and a clear niche.

2. Ask for help from friends and family

Sometimes the money your business needs is closer to home than you might expect. Financing your business with help from your nearest and dearest can be an ideal solution for retail entrepreneurs that need a little help – but it isn’t risk free. Whilst raising money in this way can be convenient, it can also place a strain on relationships that could cause trouble in the future.

If you decide that you’d like to give it a go, try narrowing your list of potential funders down to a handful of trusted family members of friends. Casting you net too widely here can have a negative affect on your chances of success, and bringing the wrong person into the fold could spell disaster for your business if they later decide that they want direct involvement.

Even once you’ve selected some savvy potential funders, make sure that your agreement is mapped out properly. You need to agree whether the business funding you receive is a loan, a gift, or a purchase of equity in your business. If it’s the latter, make sure you know just how much you’re giving away and what that means for your business before sealing the deal.

3. Ask the bank

Although there are many new and innovative ways to raise funds for modern business purposes, there are times when traditional financing products may be the most appropriate option.

Small business loans are among the most widely sought out forms of financing, yet they’re not necessarily that easy to access. Despite there being a great many high street banks and other providers of traditional financing, you’ll usually need to make a compelling business case that spells out exactly why the financer should take a chance on you and your retail idea.

Beyond this, bank business loans are not necessarily all that flexible and may require you to follow a tight repayment schedule, perhaps even imposing restrictions on how you can spend the money you borrow.

Ultimately, banks and building societies do provide a significant chunk of the business funding that’s on offer in the UK market today – but that doesn’t mean they’re the right choice for all retail entrepreneurs.

4. Use an online broker to find a personal loan

It might sound similar to asking the bank for business finance, but taking out a personal loan could give you the flexibility you need to kickstart your business. This is especially true if you use an online loan broker, since they could help you to secure a loan without the need to apply to scores of different direct lenders.

One option available to the UK’s business minded is to use Little Loans. As a popular online credit broker, they help their users to find personal loans of between £100 and £10,000 – all with flexible repayment terms that can be chosen to reflect your individual circumstances. To top their service off, they even provide potential borrowers with a loan eligibility checker to help them check their loan eligibility without affecting their credit score.

Arguably the best part about funding your small retail business in this way is that you won’t have to go to great lengths in convincing a bank to lend you money. You’ll get a flexible funding solution that suits your needs, and money could even be paid into your personal bank account on the day of making a successful application.

Choosing the right funding solution for your business

Ultimately, finding the right funding solution for your business is an important first step in any entrepreneur’s journey.

Whilst financing from a venture capital (VC) firm or a family member might be convenient, it could also see you signing over a portion of your business. This might sound like a great idea if you need the commercial support, but keep in mind that you might not enjoy the same flexibility as if you had sought out the help of an online credit broker.

All in all, there’s no one-size-fits-all solution for business funding, and finding the right option for you could take time as you research all of the available choices.