Non-dilutive funding: What to know before you apply

This blog is based on insights from the second webinar in the Fund Her Future series, supported by the British Business Bank. We spoke with grant providers, loan specialists, and non-dilutive finance brokers to gather the best advice on how early-stage female founders can access funding — while keeping full ownership of their business.

As a female founder of a tech start-up, choosing the right kind of funding to grow your business is a critical decision. If you're not ready to give up equity, there are several non-dilutive finance options that can support your ambitions — but they come with their own set of considerations.

Here's what you need to know before diving in.

Understand What You Really Need

Before you even think about loans or grants, ask yourself:

• Do I need cash to purchase equipment or inventory?

• Is it for working capital to sustain operations?

• Am I trying to smooth out my cash flow because invoices are being paid late?

Knowing the exact purpose of the funds helps you match with the right kind of finance. As Sharon from Choice Business Loans emphasised: “Understand your actual need first — then find the funding that fits.”

You’ll Still Need a Business Plan

Even without giving up equity, funders want to see:

• A clear business model

• A cash flow forecast (ideally 12+ months)

• Details of how the funds will be used and how the business can repay

Nicola from Innovate UK stressed the importance of viability — both of the business and the proposed project. That means your forecast must be realistic and supported by clear assumptions.

Grants Aren’t “Free Money”

While grants don’t require repayment, they do come with:

• Strict eligibility criteria

• Intense application processes

• Often, a requirement to cashflow the first quarter of the project

As Nicola put it: “Even with grants, they assess the risk to the public purse. You’ll need to prove your business is viable.”

Preparation is Key

Whether applying for a grant or loan, the basics matter:

• Check your credit score. Yes, your personal credit score. You're the director responsible for your business, right?

• Make sure your business bank account shows good conduct (no bounced payments)

• Know your personal risk tolerance, especially around things like personal guarantees. How much are you willing to put on the line for your business?

As Lisa said, “Just don’t panic. Take your time, prepare well, and ask for help.”

Coming Up Next:

In Part 2, we’ll break down the do’s and don’ts of applying for non-dilutive funding — including common mistakes founders make, and how to avoid costly pitfalls.