The ‘F’ Word

There are some things founders love discussing.

• Growth.
• Sales.
• Marketing.
• New ideas.

But there’s one topic that often feels uncomfortable.

Money.

More specifically, funding.

For many founders, funding can feel like the F word of business. Something awkward. Something you only think about when things go wrong. Something that might suggest your business isn’t doing as well as it should be.

And it’s not just business owners who feel that way. Research from the Money & Pensions Service shows that only 44% of UK adults say they feel comfortable talking to friends about money, meaning the majority of people still find financial conversations difficult.
Source: Money & Pensions Service

But the reality is very different.

Funding is one of the most common tools businesses use to manage cash flow, invest in growth and navigate uncertainty. Yet many founders avoid the conversation entirely.

So why does funding still feel like the F word?

To understand that, we need to talk about three things that often sit behind the funding conversation.

• Fear.
• Failure.
• Funding.

Running a business comes with a level of financial pressure most people never see.

Customers pay late.
Costs rise unexpectedly.
Seasonal dips happen.
Cash flow fluctuates.

Even profitable businesses experience periods where money feels tight.

For founders, that uncertainty can create a constant background worry.

“Will there be enough to cover payroll this month?”

“What happens if sales slow down unexpectedly?”

“What if a major customer pays late?”

These fears are incredibly common, but they’re rarely talked about openly.

Instead, many business owners feel they simply need to push through and solve the problem quietly.

There’s also the fear of being turned away when you do ask for support.

In fact, research from the UK Government found that only 34% of SMEs planning to apply for finance feel confident their bank will approve it, down from 56% in 2019.
Source: UK Government – Small Business Access to Finance Call for Evidence

It’s no surprise that many founders hesitate to start the conversation about funding at all.

But financial uncertainty is part of running a business. What matters most is how you respond when it happens.

And for many businesses, funding can be one of the tools that helps manage those moments.

One of the biggest myths about funding is that you only seek it when something has gone wrong.

Many founders worry that needing finance signals their business isn’t performing.

In reality, many healthy companies use funding strategically throughout their growth journey.

Part of the problem lies in how traditional lending works.

Banks tend to operate with strict lending criteria and conservative risk models. As a result, many viable businesses are declined even when they are growing and profitable.

In fact, fewer than half of SME loan applications to major banks are approved in the UK, meaning many business owners are turned away even when their businesses are performing well.
Source: Center for Finance, Innovation, and Technology (CFIT)

When a business owner receives a rejection, it can feel personal.

But it shouldn’t.

A bank saying no doesn’t mean your business has failed.

It simply means that particular lender decided the application didn’t meet their criteria.

For many founders, it’s just one answer from one institution.

And increasingly, it’s not the only option available.

Funding is often misunderstood.

At its simplest, funding is a financial tool. It helps businesses manage cash flow, invest in opportunities and maintain momentum.

Businesses use funding for many different reasons, including:

• managing seasonal fluctuations in revenue
• purchasing stock or inventory
• hiring staff
• investing in marketing or expansion
• upgrading equipment
• covering short-term cash flow gaps

Despite this, some SMEs avoid exploring funding altogether.

In fact, the UK still faces a significant shortfall in available finance for small businesses. Estimates suggest the SME funding gap is over £65 billion, meaning many companies struggle to access the capital they need to grow.
Source: Allica Bank

This gap is one reason alternative funding models have emerged in recent years.

These models are designed to support businesses that may not fit traditional bank lending criteria.

One example is revenue-based finance.

Rather than fixed monthly repayments, revenue-based finance links repayments to your business performance. When revenue increases, repayments increase alongside it. When business slows down, repayments naturally adjust.

For many businesses, this creates a funding model that works with their business rather than

Fear.
Failure.
Funding.

Three words that many business owners avoid discussing.

But they shouldn’t be taboo.

Every business experiences uncertainty at some stage. Every founder faces difficult financial decisions. And many successful companies use funding strategically as they grow.

Funding isn’t failure.

It’s simply one of the tools businesses use to move forward.

Because funding shouldn’t feel like the F word.

If you’d like to speak to someone about funding for your business, you can start an application online and our team will guide you through your options.