2. Investment finance

Investment finance (also known as equity finance) involves selling part of your business (‘shares’) to an investor. The investor will take a share of any profits or losses that the company makes.

Advantages

Advantages include:

  • investors can bring new skills and opportunities to the business, eg marketing or exporting overseas
  • you won’t have to pay any interest, or repay a loan
  • you share the risks of the business with your investors

Disadvantages

Disadvantages include:

  • it can be a demanding, expensive and time-consuming process
  • you’ll own a smaller share of your business (although your share could eventually be worth more money if your business succeeds)
  • you may have to consult your investors before making certain management decisions
  • only limited companies can sell shares, so you can’t raise money in this way if you’re a sole trader or in a partnership

You should get professional advice about business finance.

Tax relief to investors

Some government schemes help companies raise investment finance by offering tax relief to investors:

Find funding

You can look for either:

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