How to get business finance without a proven track record

Getting a business off the ground can be hard enough. Harder still when you don't have past performance or proof of concept to point to when you're looking for funding.

And when it comes to most debt finance, lenders usually want to see a track record as part of their credit assessment criteria.

In this article, we look at which types of finance place less emphasis on your business' trading history.

(Note: This isn't a comprehensive list, and there may be other forms of finance available which are more appropriate to your business.)

Look for an Angel

Your track record may be important to some funders or investors, but potential may also be significant. That's why an Angel Investor could be an option.

Angels invest their own money into a business in exchange for a minority stake.

They tend to be entrepreneurs themselves so should be able to spot opportunities for you. They take pride in helping your business become a validated, profitable entity.

Working with an Angel Investor will usually mean giving up some control in your company. But being able to benefit from their skills, contacts and industry knowledge can take your business to the next level.

There are a few different ways to find an Angel, from attending networking events to searching member directories. Use our checklist to see if you're ready for Angel Investment.

Angels invest £1.5 billion in UK businesses every year.

Engage your customers

Maybe you don't have an obvious track record but you do have a great product.

Maybe you're even starting to build a loyal customer base. Or you have a business plan that people say they believe in.

While it might not be enough to get investment or loans the traditional way, it could capture the attention of the general public.

Equity Crowdfunding can help you raise money from lots of investors via a regulated online platform.

You could get capital from existing investors and be able to put your business or product in front of a new or interested market.

However, it can be a time-consuming process - and success is far from guaranteed.

You often need a clear business plan to showcase your growth strategy and to target the right platform for your business.

Each crowdfunding platform offers different benefits depending on the age and type of the business, so carry out your due diligence.

But before you do, find out if Equity Crowdfunding is for you, and do your research to make sure your business is ready.