The Complete Guide to Non-Debt Funding for UK Start-Ups

A lot of startups look to raise capital without taking on debt but it can soon feel like navigating a maze, especially when you’re juggling product builds, customer acquisition and the day-to-day realities of early-stage life. The good news is that the UK offers one of the richest ecosystems in Europe for non-debt funding, from equity schemes to grants, R&D tax reliefs and innovation competitions. Here’s Stable's clear, founder-friendly guide to what’s available, who can apply, and how to get started.

1. Equity Funding (But Not Loans): Angel Investment & Venture Capital

Although technically you give up equity, this is still non-debt capital: no interest, no repayments.

Angel Investors

What it is: High-net-worth individuals investing their own capital.
Eligibility: Typically pre-seed to early-stage start-ups with proof of concept, early traction, or a compelling vision.
How to apply: Warm introductions via networks like UKBAA, LinkedIn, accelerators, or pitch events. Prepare a deck, a data room, and a clear use-of-funds plan.

Venture Capital

What it is: Professional funds deploying institutional capital.
Eligibility: High-growth, scalable business models with strong market potential. Ideal for seed to Series A.
How to apply: Research relevant funds, request warm intros, and prepare a deck, financial model and product demo. Most VC firms have submission portals on their websites.

2. Equity Schemes That Make You More Fundable (SEIS & EIS)

These aren’t funding themselves, but they unlock capital by making you more attractive to investors.

SEIS (Seed Enterprise Investment Scheme)

Eligibility

• Trading for less than 3 years
• Under £350k in gross assets
• Fewer than 25 employees
• Raising up to £250k

How to apply

Submit an Advance Assurance request to HMRC with your pitch deck, business plan, cap table and investor details. This reassures angels that your round will qualify for SEIS tax reliefs (75% upfront relief).

EIS (Enterprise Investment Scheme)

Eligibility

• Trading less than 7 years
• Under £15m in gross assets
• Fewer than 250 employees
• Raising up to £12m total

How to apply

Same process as SEIS—submit for Advance Assurance and then complete EIS1/EIS3 forms after the round closes.

3. UK Government Grants & Innovation Funds

Government grants are the holy grail: non-repayable and non-dilutive.

Innovate UK Grants

What it is: The UK’s flagship innovation funding programme. Grants typically range from £25k to £1m+ for high-innovation R&D.
Eligibility:

• UK-registered businesses
• Projects with technological or scientific innovation
• Clear commercial application
  How to apply:
• Monitor competitions on the Innovation Funding Service website
• Prepare a detailed application including: technical approach, market analysis, risks, team strength and financial projections
• Partner with universities or RTOs if required
  Competition is intense—only 10–20% are accepted.

Smart Grants

A subset of Innovate UK, funding truly transformational technologies. Same application process, higher bar.

Local Growth Funding / Regional Grants

Examples include:

• Scottish Enterprise grants
• Welsh Government innovation funding
• Northern Ireland Invest NI programmes
• Local Authority grants (often for job creation, digital adoption or sustainability)

Eligibility

Varies by region, but often requires job creation or local economic benefit.

How to apply

Visit your regional growth hub, LEP, or devolved government website and follow the grant-specific application instructions. Use www.growthhubfinder.co.uk to find your regional growth hub.

4. R&D Tax Credits

Often the biggest cash injection available to early-stage founders.

What it is

A rebate on qualifying R&D expenditure. Start-ups can receive a cash credit even if pre-revenue.

Eligibility

You must be doing work that:

• Seeks technological advancement
• Includes technical uncertainty
• Relates to your trade (current or future)

How to apply

Submit an R&D claim via your Corporation Tax return (CT600) with a technical narrative and cost breakdown. Many start-ups use specialist advisors, others file independently using HMRC’s digital service.

Stable can help connect you with an R&D tax credit, Audio-Visual Expenditure Credit (AVEC) and/or Video Games Expenditure Credit (VGEC) expert, so please reach out to us at info@stablepayments.co.uk for more information.

5. Innovation Competitions & Non-Equity Accelerators

Examples

• Digital Catapult programmes
• Tech Nation-style industry accelerators
• University incubators
• Corporate innovation challenges (Barclays Eagle Labs, NatWest Accelerators)

Eligibility

Usually early-stage UK start-ups working on specific themes (AI, climate-tech, fintech, creative industries, etc.).

How to apply

Apply directly on programme websites. Expect a written application, pitch video and interview.

Final Thoughts

Non-debt funding in the UK is broader and richer than most founders realise. Whether you’re building deep tech, SaaS, consumer products or green innovation, a smart combination of grants, investors, and tax incentives can significantly reduce dilution and extend your runway. And crucially, timing matters, as most schemes are competitive, so begin early, prepare thoroughly and demonstrate clear commercial outcomes.

And if it turns out you're not eligible for some or all of the above, don't despair. Debt funding can be a useful growth lever for businesses early in their journey, so don't hesitate to reach out to the team at Stable for information and guidance, you can reach them at info@stablepayments.co.uk.

Useful Links

Regional Growth Hub Finder: https://www.growthhubfinder.co.uk/

Startup Loans by the British Business Bank: https://www.startuploans.co.uk/