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Finding funding as an older entrepreneur

For many start-up business owners, access to funding is a critical issue, helping pay for the equipment, wages, promotion, and supplies needed to get your business idea off the ground.

Without the right funding, many start-ups can struggle with cash flow and lack the ability to pay the money they owe when it comes due.

According to research opens in new window, around 60% of start-ups fail, with 65% of failed start-ups citing cash flow as the primary cause of closure opens in new window.

The good news is that start-ups launched by older entrepreneurs opens in new window seem to have a better chance of success.

Research published in the Harvard Business Review opens in new window found that founders aged between 50 and 60 are the age group with the highest chance of success.

And a start-up business owner aged 50 is around 1.8 times more likely to start a successful company than a 30-year-old founder according to a study by Kellogg Insight opens in new window.


Funding options for older entrepreneurs

With access to funding opens in new window a vital plank in the success of a start-up, many older new business owners may feel they face a challenge in accessing the necessary funds.

Research by the Organisation for Economic Co-operation and Development opens in new window found that more than 10% of older entrepreneurs identified access to finance as a barrier to self-employment.

Dedicated over-50s support, such as PRIME operated by The Prince’s Trust, have closed in the past decade, which has left many new over-50s business owners unsure of how to secure funding for their business idea opens in new window.

The good news is that there are several routes for raising finance, and older new business owners may be able to draw on additional funds.

Typical examples can include self-funding, loans, angel investments opens in new window, crowdfunding opens in new window, venture capital, and grants opens in new window.

The British Business Bank has an interactive business funding finder tool opens in new window that you can use to create a tailored list of funding options.

So, what are the options for funding your business?



Self-funding is a typical funding option for older entrepreneurs, involving using your own money and personal savings to fund your business – this could involve existing savings you have built up during your career or by using a tax-free lump sum from your private pension if you’re aged over 55 (subject to the terms of your pension scheme rules).

Using personal savings involves funding your start-up with your own money.

This could include cash savings, investments, or other liquid assets that you have accumulated over time.

Benefits include avoiding complex loan applications and paying interest on repayments opens in new window while retaining full control over your business.

However, using personal savings can be a risky approach, with business failure having a direct impact on your personal finances – and you may have been better off investing your savings elsewhere.

Using retirement funds could prove even more risky and involves drawing down on your tax-free lump sum – up to 25% of your total private pension pot (subject to a lifetime allowance and potential income tax implications) if you are aged 55 or over (or older if required by your pension scheme rules).

It can provide a significant cash boost depending on the size of your pension pot, and as the lump sum is tax-free it offers an attractive tax advantage.

However, it would be a good idea to get advice from an independent financial advisor as you could be putting a large percentage of your pension savings at risk.


Business loans

You can apply for a business loan in the same way as any UK business.

You’ll need to provide financial information such as a financial forecast opens in new window, business plan opens in new window, cash flow forecast opens in new window, and you may need to put up assets as security.

The benefit of a business loan is that you retain full ownership of your business while repaying the loan, which helps cement your start-up’s credit rating opens in new window.

Business loans vary by lender, so you’ll need to be clear on interest rates and any repayment fees, and some loans may require a personal guarantee, such as using property you own as loan security.

Read our guide on how to apply for a business loan opens in new window.

Start Up Loans is an alternative business loan specially tailored for start-ups, with access to a £25,000 loan and 12 months of free business mentoring for successful applicants.

Learn more about applying for a Start Up Loan opens in new window.



Grants are another option and come in a number of forms, with many available for application from local authorities or public bodies.

The government has an online grants finder opens in new window that you can use to search for grants.

While grants are usually smaller in value than a business loan, they usually don’t need to be paid back.

Some grants are made in the form of discounts on business essentials, such as software opens in new window or broadband services.

Read our guide to grants for small businesses opens in new window.


Angel investors

Previous experience may make your start-up a more attractive prospect to investors, such as an angel investor.

An angel investor opens in new window is an investor who offers financial backing to a business, typically a start-up or early-stage business, in exchange for a stake in the company.

Angel investors make their investment decisions based on the start-up’s chances of success – if you have the relevant knowledge and experience, an investor may be more confident in your future performance.

Investors may require you pitch your business to them opens in new window as a potential investment.

It could be a good idea to highlight your relevant experience and skills that could help your small business succeed in securing funding when pitching.


Specialist funding

As an older entrepreneur, you may be able to access specialist funding or support to help your start-up succeed.

UnLtd opens in new window is an example of a support network for social entrepreneurs with a track record of working with older business owners who want to help their local communities.

The government has a specialist business finance finder tool opens in new windowto search for organisations across the UK offering loans, support, and mentoring.

Read our guide to the best business funding alternatives opens in new window.


Peer-to-peer lending

Peer-to-peer lending (also known as crowdfunding) is a good example of how communities can help support start-up businesses.

This is a type of funding that allows anyone to invest what they can afford in a business, typically through secure online platforms such as IndieGoGo opens in new window or Kickstarter opens in new window.

Read our guide to how crowdfunding can help your start-up business. opens in new window


Venture capital

Venture capital (VC) is a form of private equity opens in new window and financing provided by investors to start-ups and small businesses with long-term growth potential.

Venture capitalists typically come in when a company has moved beyond the initial start-up phase and is seeking substantial investment to scale up opens in new window.

It can provide large amounts of investment and valuable industry experience, mentorship, and networks, which can be instrumental in guiding a start-up’s growth.

However, VC firms can have high expectations of generating a return on their investment and typically want to exit with their investment after a defined amount of time.

VC firms will also take a percentage ownership of your start-up.


Funding applications and suitability

Depending on the business plan you have drawn up and your personal circumstances, some funding options may be better suited to your start-up than others.

Always seek professional financial advice when considering applying for or taking on debt.

When applying for funding, ensuring you have all the correct documentation to hand could make funding applications go more smoothly.


Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free Learn with Start Up Loans courses opens in new window  include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement 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 circumstances and, where appropriate, seek professional or specialist advice or support.

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