How to Fund Your Business

How to Fund Your Business


Funding should never be the reason that you haven’t started your business.

We are fortunate that technology has lessened the cost of the tools needed to start a new venture. You can set up a free website and use free social media to build brand awareness. You can go to the library to use the computer and create documents for free in Google.

At some point however, you will have to spend money to make money.


The two most common ways to get funding are:

  • Funds from personal connections (personal savings or gifts, investments, and loans from family & friends)
  • Funds from strangers (crowdfunding, loans, grants)



There’s a lot of talk about CrowdFunding, which is a way to ask individuals to provide you funding today in exchange for a product or service that will be given to them in the future.

There are many crowdfunding platforms that you can use. Kickstarter, Indiegogo and GoFundMe are the largest platforms.

Creating a crowdfunding campaign takes time and effort on your part. You need to be creative and compelling in order to reach your goal. You also need to have a product or service that people want or a great way to explain to people why they should want your product or service.



Getting a loan can be a great way to get the funds you need to start or expand your business.

Traditionally, large banks were the go-to place for business loans. However, the approval rates for loans with large multi-national banks is low (under 20% currently).

Today there are more options. Of course, you can get loans from family and friends but that’s often full of complications that you may want to avoid.

You can instead get a loan from local banks, credit unions, and nonprofit lending organizations.

If you’re a start-up or a small business looking to expand, a non-profit lending organization like Accion or Kiva Zip may be your best option. These organizations look beyond requiring that you have a high credit score and instead look at other factors to determine if you qualify. Another option is Prosper, which crowdfunds your loan with individuals providing the funds you need.

The Small Business Administration has also been a go-to place for business loans. While they do not provide loans directly they have various programs to help business owners get loans. A great tool is to use the Business USA Access Financing tool to see Government resources which can provide financing for your business.



Personal Funds

It’s often recommended that you have savings to cover your basic needs for 6 months to a year. Beyond that personal savings is a great way to fund your start-up. Also, using your own money will give you a greater incentive to keep costs low and avoid unnecessary expenditures that may feel important but won’t really help you grow your business.

You can use savings or income from your 9-5 job. If you plan on working while growing your business, you may want to consider taking out a personal loan that doesn’t require collateral, like those offered by Best Egg.

Finally, you can sell your personal items that you don’t need or use anymore.



Without using a crowdfunding platform, you can pre-sell your product from your website or using other means and use the payments you receive to manufacture the product. This would require that you create a unique and engaging way to market the product or service so that people with purchase it.



Nonprofit and government organizations offer grants for products or services that can improve the community or environment.

The Federal Government generally does not offer grants except for certain businesses in the scientific & technology industries.

States and cities give incentives to companies that will improve the local economy, environment or provide care to people who need it.

Check out your state’s economic development agency to see what resources are available to you.



Bonus Tip:

If you produce food or food products whole foods provides loans for expansion and capital expenditures. Check out the following link for details. Whole Foods Loans.