The right funding depends less on how much you need than on where your business is. A bank will not lend to an idea, and an equity investor has little interest in a steady local business that will never scale. This map sets out what realistically fits each stage. For how each type of funding works, see our guide to the main types of business funding.
Stage 1: An idea with no revenue
At this stage you have nothing a lender can assess, so the realistic options are your own savings, support from family, competitions and awards, and incubators. Incubators and accelerators often provide small amounts of seed funding along with mentorship and workspace. The goal of this stage is to prove that customers will pay, because that is what unlocks every later stage.
Stage 2: Just started trading
Once you have customers, even a few, development funders and microlenders start to become options. The Small Enterprise Development and Finance Agency (SEDFA) combines business support with finance for small businesses, and many targeted funds for women, youth and township businesses consider early-stage applicants. Supplier credit, where suppliers let you pay 30 days after delivery, is also funding at this stage, and often the cheapest you will get.
Stage 3: Established, with a trading history
With a year or more of financial statements and bank records, the options widen considerably:
- Bank term loans and overdrafts, if your records reconcile and your tax is in order
- Asset finance to buy vehicles and equipment, secured against the asset itself
- Invoice discounting, which advances cash against invoices your customers have not yet paid
- Revenue-based lenders, who assess card or bank turnover and take repayments as a share of sales
Stage 4: Winning bigger contracts
When a large order or tender is bigger than your cash flow, purchase order funding pays your suppliers so you can deliver, and is repaid when the client pays. It is built around the contract, not your balance sheet, which suits growing businesses with a strong order and a thin track record.
Stage 5: Ready to scale
Businesses that can grow quickly into new markets may be ready for equity: angel investors at the earlier end, venture capital and private equity at the later end. Equity has no repayments but costs you a share of ownership, so it only makes sense when the growth it funds is worth more than the share you give away. Development finance institutions also fund expansion for businesses with a strong track record.
Frequently asked questions
What funding can I get with no revenue?
Mostly your own money, family support, competitions, awards and incubator programmes. Lenders need trading history.
When will a bank consider my business?
Usually after at least a year of trading, with financial statements, clean bank records and tax compliance.
Is supplier credit really funding?
Yes. Paying suppliers 30 or 60 days after delivery frees cash just like a loan, usually at no cost.
When should I consider equity?
When the business can scale well beyond its current size and needs more capital than it can responsibly borrow.
Where can I see all the funding sources in one place?
Our list of small business funding sources covers them.
Originally published in November 2024. Updated September 2026.
