Introduction
Small and medium enterprises (SMEs) in the UK have two main paths to boost cashflow: borrowing or selling equity. It’s the classic SEIS vs loans debate. Do you take on debt, with repayments and interest? Or do you invite investors, share the upside, and access tax relief? Let’s break down both.
In one corner, you have working capital loans from providers like Knight Capital Funding—fast, familiar, but carrying ongoing costs. In the other, Oriel IPO’s commission-free SEIS and EIS equity funding—tailored, tax-efficient, but less obvious at first glance. Which is right for your business? By the end, you’ll have practical insights and a clear action plan.
Understanding Working Capital Loans
Working capital loans help you cover day-to-day expenses—payroll, stock, rent. Providers such as Knight Capital Funding use proprietary tech to underwrite quickly. That means:
- Rapid decisions (often within 24 hours)
- Access to funds across all UK regions
- Flexible use of proceeds
But it’s still debt. You’ll face:
- Fixed or variable interest rates
- Repayment schedules, reducing your monthly freedom
- Potential covenants and fees if you miss a payment
When weighing SEIS vs loans, many founders fixate on speed. Loans win hands down. But the catch lies in cost and long-term impact.
Knight Capital Funding: A Quick Overview
Knight Capital Funding is a tech-driven platform under the Ready Capital umbrella. They pride themselves on:
- Advanced underwriting systems
- Industry-leading customer satisfaction
- A faster alternative to traditional bank loans
Their edge? Efficiency. They analyse data, reduce paperwork, and deliver funds quicker than most banks. That’s especially attractive when an unexpected bill lands on your desk.
Yet even the slickest loan has a price tag. Interest accrues. Payment deadlines loom. And you still owe every penny borrowed—plus the lender’s cut.
Limitations of Traditional Loans
Loans may feel safe. You keep full ownership. But consider:
-
Cashflow Pressure
Regular repayments can squeeze your working capital, especially in slow seasons. -
Interest Costs
Even a moderate rate adds up. Over 12–24 months, you might repay 10–20% more than you borrowed. -
Covenants and Clauses
Missing a payment could trigger penalties or default terms, affecting your credit rating. -
No Upside Sharing
If your business booms, the lender doesn’t share the prize—even though they funded your growth.
In the SEIS vs loans showdown, loans are simple but inflexible. If you crave breathing room and tax perks, equity funding through SEIS/EIS offers a compelling alternative.
Introducing Oriel IPO: Commission-Free SEIS/EIS Equity Funding
Enter Oriel IPO. We’re an online investment marketplace connecting UK startups with angel investors under SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme). Unlike many platforms, we charge zero commission on funds raised. Instead, startups subscribe to our service.
Key features:
- Commission-free model: Keep more of the money you raise.
- Curated, vetted opportunities: Only eligible SEIS/EIS businesses on our site.
- Educational resources: Guides, webinars and insights to navigate SEIS vs loans.
- Transparent subscription fees: Predictable costs, no hidden percentages.
With SEIS/EIS, investors unlock tax reliefs up to 50% in Year One, plus capital gains exemptions. That makes your offer more attractive—and means you pay no interest, no monthly instalments. It’s a different kind of partnership.
Key Benefits of SEIS vs Loans
Let’s compare:
-
Tax incentives vs interest
SEIS: Up to 50% income tax relief.
Loans: Interest rates from 6% to 20%+. -
Ownership dilution vs fixed repayment
SEIS: You share equity, not repayments.
Loans: You bear debt, regardless of performance. -
Long-term support vs defined term
SEIS: Investors often mentor and open doors.
Loans: Relationship ends when debt is cleared. -
No balance-sheet burden vs immediate liability
SEIS: Equity input doesn’t appear as debt.
Loans: Must show liabilities, affecting future borrowing.
If you compare SEIS vs loans, the immediate cost advantage and support network often tilt the scales toward SEIS/EIS, especially for high-growth ventures.
How Oriel IPO Works
Getting started is simple:
- Sign up on our platform.
- Submit your pitch deck and financials.
- We vet your eligibility under SEIS/EIS rules.
- Your listing goes live—visible to our network of investors.
- You subscribe to a transparent monthly plan.
No hidden fees. No commission on funds raised. You keep the full investment (minus procedural fees, like HMRC registration).
Alongside funding, we offer:
- Webinars on SEIS vs loans trade-offs.
- Downloadable guides to prepare investor pitches.
- Community forums for peer support.
It’s all about empowering founders to choose equity with confidence.
SEIS vs Loans: Side-by-Side Comparison
| Feature | Working Capital Loans | SEIS/EIS Equity Funding |
|---|---|---|
| Speed | 24–48 hours | 2–4 weeks (due diligence) |
| Cost | Interest + fees | Subscription fee |
| Tax incentives | None | Up to 50% income tax relief |
| Ownership | 100% remains yours | Equity sharing |
| Support network | Limited | Investor mentorship |
| Repayment | Fixed schedule | None |
| Balance sheet impact | Increases liabilities | Equity, no debt |
This comparison shows why SEIS vs loans is not just about funding—it’s about the kind of partnership you want for your business journey.
Practical Steps to Access SEIS Equity Funding
-
Assess eligibility
– Turnover under £200k
– Fewer than 25 employees (for SEIS)
– Qualifying trade -
Prepare your documents
– Financial forecasts
– Business plan
– Investor pitch -
Choose a platform
– Weigh commission vs subscription
– Check vetting standards
– Evaluate educational support -
Engage investors
– Use our curated network
– Highlight tax incentives
– Share clear growth milestones -
Finalise investment
– HMRC advance assurance
– Allot shares to investors
– Confirm tax relief eligibility
These steps demystify SEIS vs loans and show why equity funding can be smoother than you think.
Real-World Example
Imagine a tech startup making bespoke software for local retailers. They need £150,000 to refine their platform and hire two developers. They face two options:
- A working capital loan at 12% interest.
• Monthly repayments of ~£14,200 over 13 months.
• £27,400 in interest alone. - SEIS funding on Oriel IPO.
• 50% tax relief attracts investors.
• They raise £150k with no repayments.
• Founders give up 12% equity but secure mentors.
At scale, that £27k saved on interest—and the ongoing investor support—can reshape growth trajectories.
Conclusion & Next Steps
Whether you’re trapped by cashflow gaps or itching to scale, consider the broader picture of SEIS vs loans. Loans bring quick cash but weigh you down with debt. Oriel IPO’s commission-free SEIS/EIS equity funding removes that burden, adds tax relief and connects you to seasoned investors. You gain more than money—you gain a growth community.
Ready to make the switch?
