Do You Need Funding? A Starter’s Guide to Borrowing Smarter

When you’re starting a business, it’s easy to believe funding is the missing piece, as if everything would finally make sense if you could just borrow a bit of money.

That feeling is common, especially if you’ve never seen a business built from scratch before.

But here’s a grounding truth: most UK businesses start with under £5,000, and many begin with almost nothing at all. Borrowing isn’t the starting line. It’s just one tool, and not the first one you need.

Let’s walk through a way to think about funding, so you can begin from clarity, not fear.

You don’t need money first, you need proof your idea works

A lot of new founders imagine they need branding, a website, equipment or subscriptions before they can even call it a business. That story leads straight to borrowing. But early funding can’t replace the real foundation: proof of concept.

You can test almost any idea without spending much at all. A simple landing page, a tiny beta offer, a message to someone who fits your ideal customer, a small version of your service that uses what you already have.

That’s your MVP: the smallest, safest version of your idea. If it sells, great. You have evidence. If it doesn’t, you’ve learned something valuable without taking on debt. Borrowing makes sense only after you’ve seen a spark of demand.

Borrowing too early creates pressure your business can’t hold yet

Debt feels heavy when your business is still in its early days and still taking shape.

Instead of exploring, you feel obligated. Instead of learning, you feel rushed. Instead of experimenting, you feel behind.

And when income is unpredictable, those repayment dates create stress. For many first-gen or neurodivergent founders, that pressure can shut down creativity and make starting feel harder, not easier.

Borrowing is useful later, when:

• money is already coming in

• your offer is working

• you can see exactly how the borrowed funds will increase capacity or revenue

Before then, it’s like putting weight on a bridge that hasn’t been tested yet.

You can start smaller, and safer, using low-cost alternatives

Debt-free doesn’t mean DIY-ing everything forever. It means starting lightly, so the business has room to grow before you add pressure. There are many ways to get moving without borrowing:

• You can earn before you invest by pre-selling a simple offer, running a small beta round, or offering a day-rate-style service that uses skills you already have.

• You can build with free or low-cost tools - Canva, Notion, Google Docs - a one-page site or even social media as your “shop window”. You don’t need the polished version to begin.

• If cash feels tight, you can support your flow without loans: ask clients for deposits, use instalment plans, negotiate longer terms with suppliers or create a quick micro-offer to raise a small amount of money.

• You can also reduce costs by borrowing equipment, swapping skills, using community business hubs or tapping into local grants.

These routes give you momentum without locking you into repayments before you’re ready.

Is borrowing for you?

You don’t need funding to start a business. You need a simple offer, one person who wants it, proof that your idea has legs. Borrowing becomes powerful only when it amplifies something already working, not when it fills a gap that clarity and testing can solve for free.

If you are considering debt but not sure if it’s the right time, grab a copy of the “Should You Borrow Yet? A Readiness Checklist”. Sign up to The Stack for the checklist and other free resources to support you on your business journey.