4 Ways to Find Money for a Small Business
Starting a business is a major life decision filled with many moving parts. Beyond coming up with an idea, you’ll need a solid business plan and enough capital to bring that idea to life — ideally without going into debt. The best-case scenario is a business that requires little initial investment to get off the ground. Here are four proven ways to find funding for your small business.
1. Funding Key: Yourself
One of the most straightforward options is self-funding — using your own savings or assets to launch your business. While this approach carries higher personal risk, it also gives you full control and ownership. You’ll be solely responsible for both the success and failure of your venture, but you retain complete independence in decision-making.
2. Funding Key: Family and Friends
Family and friends can be an affordable and relatively easy source of startup capital. Combining their financial help with other funding methods can give you flexibility. However, always put agreements in writing to protect both sides financially and to prevent potential conflicts if things don’t go as planned.
3. Funding Key: The Bank
Bank loans can be a solid option — if you qualify. Even with a strong business plan, banks are often cautious and may require collateral or proof of income. If you meet specific criteria, such as for microloans or high-risk lending programs, you might secure financing tailored for small business development.
4. Funding Key: Investors
Finding investors can be more challenging than getting a loan, but it can bring in not just money, but expertise and connections. Keep in mind that most venture capitalists expect a controlling stake in exchange for funding, with the goal of later selling the business at a profit.
There are also alternative funding paths, such as advance payments from suppliers or clients, or small business grants. The key to successful fundraising is timing and diversification — don’t be afraid to combine two or three different methods to get your business off the ground.
