Financing your business venture is perhaps the most difficult aspect of starting up and is undoubtedly why many ideas never see the light of day.

The current economic climate has certainly not helped entrepreneurs looking to start up in business but there are a number of sources of finance that do not involve borrowing from a bank.

"The UK offers many different types of funding for businesses but little is commonly known about the breadth of options now available," says Sally Goodsell, chief executive of Finance South East.

"Incomplete knowledge can lead entrepreneurs to make compromising arrangements, like agreeing to inflexible loan repayments. Entrepreneurs need to proactively search for the perfect funding package for their business rather than relying on their bank or the government to provide the answers."

Finance South East offers the following tips to entrepreneurs looking for the funds to get their business up and running:

Do it yourself
When starting up a business most entrepreneurs make a personal contribution to the finances. Few are lucky enough to have substantial spare cash to invest more at later stages, but if you haven't done so already, putting your own cash in can encourage other investors.

Investing a significant chunk of your own money illustrates your faith in the company which helps give future investors confidence. In fact, some commercial forms of funding will exclude you unless you make a sufficient personal commitment.

Family and friends
While some people feel uncomfortable with the idea of approaching friends or family for investment, it is worth noting that around 90% of business angel transactions in the UK fall into this category. While early-stage investment is inevitably risky the rewards can be high.

As an added incentive to investors shares in your company may qualify for Enterprise Investment Scheme (EIS) tax relief. EIS is one of the very few tax breaks still available to high net worth investors in the UK, so contact the Small Company Enterprise Centre (SCEC) of HM Revenue and Customs to find out if your company qualifies.

Angel investment
Business angels actively seek to make a direct investment in growing companies in return for an equity stake. They can be found through specialist networks or professional advisors, such as accounting firms. Angels invest for all kinds of reasons and have very different budgets, putting in as little as a few thousand pounds to over £100,000. Many angels are established business people who are looking to use their experience and contacts in a new opportunity and may wish to be actively involved in your business.

Corporate venturing
Corporate venturing is the process of two companies entering into a mutually beneficial partnership and the UK has become the European leader in this practise.

The larger company in the partnership will usually invest either money or goods and services into the smaller company in return for access to technology or skills. The most important form of corporate venturing for growing businesses is the direct approach, where large companies invest in organisations that have complimentary products or services to their own core activities.

AIM and PLUS Markets
The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange, allowing smaller companies to float shares with a more flexible regulatory system than the main market. AIM was launched in 1995 and has raised almost £24bn for more than 2,200 companies.

PLUS Markets is the new stock exchange in London for small and mid-caps, where 7,500 UK and European Securities are now raising funds through public listings.

Speak to a specialist corporate stockbroker to find out if either of these options is suitable for you.

Search your region
Some regional funding organisations manage their own funds as well as providing support services. Organisations such as Finance South East specialise in the identification, funding and development of ambitious, high potential growth businesses. For example its £10m Accelerator Fund mezzanine loan has had a major impact on the growth of SMEs in the south-east of England. Successful applicants have seen turnover increase by around 30% over the six-month period from September 2007 to February 2008.

For more information visit www.financesoutheast.com [1]