Business Funding

1. Bootstrapping

Fund your own business. Use your savings to start your business, you can keep all the profits and company ownership.

2. Loans from Friends and Family

Ask your friends or family members for loans. This approach could possibly become negative if they lose money on the investment. However, if the business succeeds, there can be a stronger bond formed.

3. Credit Cards

Credit cards are usually the easiest option for getting money, but they come with a high cost for the capital, since credit card interest rates tend to be high. “The good news is that they’re flexible,” “You don’t have to justify what you’re going to spend the money on.”

4. Crowdfunding Sites

Online crowdfunding sites have become popular in the past few years. They’re usually used to help businesses raise money to launch a specific product. Crowdfunding can be time consuming and requires putting information on the site, often with a video or photos of the product.

5. Bank Loans

When you make your case to the bank, you’ll need to show that you have a history of paying back debt. The bank will want to see a business plan and financial forecast.

6. Angel Investors

Angel investors are high-net-worth individuals who get an equity stake in return for their financing. They expect to make a profit and usually have business expertise they share with you to help your company grow. Know that angel investors may scrutinize your business plan and you’ll have to build a case as to why they should invest, which isn’t a bad thing, says Alexander. The vetting process for entrepreneurs should ensure that the business plan is solid.

7. Venture Capital

Like angel investors, venture capitalists take equity in your business in exchange for financing. Venture capital funds resemble mutual funds in that they pool money from many investors. Venture capitalists also have business expertise in the areas in which they invest and will be involved in running the business. In exchange for potentially large amounts of money, you’ll give some control and equity.

8. SBA Loan

An SBA loan is a small-business loan that can help cover startup costs, working capital needs, expansions, real estate purchases and more. This type of financing is issued by a private lender but backed by the federal government.