What the banks can offer for growth finance

You should develop a good relationship with your high-street bank from the time when you first start your business. That way, by the time you find your business is growing, the bank will be more willing to offer you additional finance options to continue that growth. This guide will give you a greater understanding of what the banks can do for your business.

Debt finance

  • Banks offer business loans which can be tailored to meet the growing needs of your business
  • Amounts available range from £5,000 to over £10m.
  • The loans can be used for expansion, product development, or the purchase of assets
  • The benefit of going down this route is that you do not have to sell part of your business
  • You should provide for service fees and charges and a - depending on your terms, sometimes expensive - repayment package

Asset finance

  • If your business requires finance to buy new equipment in order to continue your growth, you can look into borrowing the funds from your bank
  • The amount borrowed is secured on the asset you need to buy; the loan is funded from the cash generated by the same equipment
  • Most banks will lend your business sums upwards of £25,000
  • The repayment periods are usually set for between three and seven years

Direct equity investment

  • The bank may also consider buying equity in your business
  • The benefits include having the strength of the bank's brand behind you and the credibility that it brings your business
  • For the bank to consider investing, you will need:
    • a positive sales trend
    • above average growth
    • an experienced management team
    • a large UK or global market
    • strong corporate governance
    • good exit prospects
  • The bank will look for an equity requirement of £1m or above

Detailed advice on growth finance

  • Your high-street bank can help you find private capital through identifying various sources such as venture capitalists or strategic investors
  • They can also give you advice on the financial implications of giving up some of your equity
  • They will discuss current market conditions and investor sentiment and give advice on whether flotation is appropriate for your business


  • Determine how much money you need to grow; then speak with your bank about the kinds of finance they can offer you
  • Make sure the plans you have for your business growth are realistic and based on solid figures and projections
  • Ensure you business is ready for growth investment
  • If you are going forward for direct equity investment, it is a good idea to seek advice from a business adviser and a lawyer


I am uncertain as to which kind of growth finance is suited to my business. Why should the bank be my first port of call?
Your banking contacts should have a good relationship with you, and as they will have dealt with you over a period of time, they will be familiar with both your business and your financial situation. It is a good idea to speak with your bank about the kind of finance they can offer your growing business. You are not bound to take them up on any finance they might offer; and it might be you may find alternative routes such as flotation, or a VC injection more to your liking in the end; but your bank's advice may well help you decide what is best for your business.


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