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A Guide to Finance and Funding

An introduction to the types of finance options available to you including private finance, sponsorship and public funding.

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Ideally your exceptional work will generate enough money to run your business, cover your expenses and fund new developments. But sometimes you might also benefit from a little financial help. 

When thinking about how to finance your work, you may find it easier to identify a source of income for certain areas compared to others. However, you’ll likely need money to: 

  • develop your project
  • sustain your business until it's able to make its own income
  • subsidise activity that doesn’t create revenue but helps develop your work

There are several ways to finance your business activity and projects and it’s important you understand the different options available.

The most common types are:

  • Private investment and sponsorship: from a particular business
  • Public funding: European, UK and Scottish government, local authorities, Creative Scotland, Scottish Enterprise, Business Gateway, Chambers of Commerce and Lottery funds
  • Personal investment: equipment, assets, security, cash from private sources, friends and family, partners and shareholders
  • Other investment: bank finance (overdraft, loan, enterprise finance guarantee), business angels, sponsorship, in kind support, grants and awards from charitable trusts and foundations, crowdfunding.

Getting started

Before you start planning your project you’ll need consider how others will value your work and who would buy or fund your idea. 

To get funding you normally have to submit an application supported by a plan – and show how your business has been spending its money. 

You’re competing with lots of other businesses for funding so it’s important to show your potential funders:

  • any investment you’ve made or made by others
  • exactly how the money will be invested
  • what they’ll get for their contribution 
  • you can make a return on their investment or show the impact of their grant
  • the amount of income you expect to make, outlined in a budget and cash flow forecast

Before you approach a funder or investor, protect your work as Intellectual Property by copyrighting, patenting or trademarking it. 

If you find a funder, carefully consider the benefits and challenges the opportunity presents and whether it’s suitable for your business.

A Guide to Finance and Funding

Funding options for your business and projects

Bank finance

Banks can offer your business an overdraft, loan or Enterprise Finance Guarantee – supported by the Department for Business Innovation and Skills. If you require a small amount of money – typically less than £5,000 – they may suggest a credit card. 

Banks consider your application based on a risk assessment of your business and your ability to repay. So it’s important you understand your own financial accounts, forecasting and analysis well enough to discuss it with a bank manager. 

When thinking about the amount of money you require, ask yourself:

  • How and when you’ll be able to make the repayments
  • If you can contribute money to match the bank funding
  • If you have any security or savings you can use to underwrite a loan

Bank managers are more likely to support your business if they fully understand what you do. So when you approach a bank for funding, ensure you have a business plan that:

  • Is complete
  • Is clearly written and avoids technical jargon
  • Includes economic industry analysis and social trends
  • Outlines your strong management team or how you intend to develop one
  • Identifies how your business is competitive and will succeed above others

Banks make decisions purely on a financial basis. So don’t be discouraged if you’re not successful the first time you apply. Sometimes you have to revise your business plan to get a commitment to investing in your business.

There are a lot of different banks to choose from, so ensure you feel confident in your bank manager.

Business angels

These certified investors give their own capital to your business. Business Angels (BAs) are hands-on, so if you want complete control of your business, this isn’t the option for you. In return for their investment, BAs normally expect you to:

  • Give part or joint ownership of your organisation
  • Involve them in your board of directors – including memorandum and articles, investment agreements and contract of employments 
  • Register your business as a Limited Company
  • Return their money after 3 years, or review their profit return.

If you have a business with a high potential to make money, BAs might be interested in you. However, investing is a risk, so you need to provide a focused business and marketing plan. 

Remember, BAs receive hundreds of applications and invest in very few – so make your business plan stand out and highlight your unique selling points. Creative, clever marketing can cause a buzz about your business – even before you present your business plan.


To attract a sponsor you need to show how your project will succeed, and provide a focused marketing plan. You must also try to prove that your project, marketing, and audience or client base fits with their marketing needs.

It’s best to establish a relationship with possible sponsors, rather than asking them for money as a stranger, or for a single event. This allows them to understand what you do and how they can be involved in the ongoing growth of your business.

Your sponsor also needs to know exactly how much money you require, why you need it and if you’re approaching other potential sponsors. Some prefer to be the only sponsor to avoid competition. 

Public funding

Grants and loans are popular sources of public funding for start-ups and projects. 

Most funding from public sources, trusts or charities depends on your individual situation, and the circumstances of your project, business and your audience or client base. Each funding scheme has different criteria and usually can fund only a proportion of your project’s costs. 

The competition for this type of funding is high. Funders need to be convinced that your idea is sound, fits with their aims and will be carried out competently. 

Before approaching a public funder ensure you can: 

  • Tell them what you do, how long you’ve existed and what you’re aiming to do
  • Identify how you’ll use their investment and any existing support you already have
  • Provide evidence of other sources of finance that you and others are providing to match their investment. This match funding should be monetary, but it can include in-kind support, like exchange of services for other services. 

Some funders will want your business to operate within a specific legal set up that provides an accountable management structure. But it’s best to make decisions about your legal status and objectives based on your own business needs, rather than be swayed by your choice of grant. 

Think carefully before you accept financing. Ensure you’re happy with the structure and can manage any additional administrative costs and paperwork. Don’t limit your options or creativity because of funding obligations.

Be prepared to spend time on research for this type of funding, as schemes, deadlines and criteria change regularly.


Crowdfunding aims to raise a large pot of money from lots of little investments or advance sales. 

It allows people to invest or donate a sum of money to help get your particular idea or project off the ground. Outstanding marketing is essential to raising money for your project this way. And as the name suggests, you need a crowd to make it viable. It’s best suited to projects with some or all of the following:

  • A strong, clear message and wide appeal
  • An established audience or fan-base 
  • A good network to reach new clients

People want to know what they’re investing in so provide clear objectives, tell them what their money does and how people can benefit from the project or activity. Also be clear about what you’re offering in return because you need to be able to deliver on this – your credibility is at stake.


Further information

  • Support Directory – Here you’ll find a complete list of organisations and websites providing support to creatives working in Scotland.
  • Better Business Finance – Set up by Barclays, HSBC, RBS, Lloyds and Santander in 2011, Better Business Finance provides impartial information and support to businesses and entrepreneurs looking to develop and grow.
Disclaimer: We want to keep you in the know, so we offer a wide selection of useful resources. But Cultural Enterprise Office isn’t responsible for the advice and information of external organisations in this document. So if you have any questions, please contact the specific organisation directly. 

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