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9 Sources of Business Funding (Because Money Doesn’t Grow on Trees)

July 19, 2019

Caution is important when spending. Especially if it’s someone else’s money.

There might come a time in the process of starting a business that you realize you have no money or that point is looming on the horizon. This is perfectly fine if you have a solid source of business funding.

Don’t worry, you have options.

Options are nice, but not all of those sources of business funding will work for every business owner. On the other hand, more than one business funding option might create the perfect flow of cash to keep your enterprise above water.

Business funding methods

Before we go on, it is important to note that while I am about to lay some business funding options out in front of you, this is not an easy process. It is one of disappointment and unmet expectations. It’s not for the faint of heart. But neither is starting a business.

Let’s look at each funding option a little more in-depth.

Personal savings

Before looking to other people or organizations for business funding, look to yourself. If you don’t personally invest in your business, you can’t expect others to.

If you have the personal funds to invest in your business, do it. Use your own cash, collateral, or other assets to get your business off the ground. Not only does this give you complete control of your business, but it also shows people on the outside that you have faith in your business and you are committed to its success.

As always when it comes to business finances, caution is key. If you use your personal funds to start your business, you are at risk of losing everything. Also, you might miss out on the insight, guidance, and security that goes along with having other people involved.

Unless you are extremely wealthy, using your personal savings to start your business is not something you can just get up and decide to do one day. If you want to be this level of self-sufficient, you need to start saving. Now.

Family and friends

We all need somebody to lean on.

And most of the time, that somebody is a family member or close friend.

Consider asking them for some financial help to kickstart your business. This type of business funding can take the form of loans or equity in exchange for cash. If you are asking for funds from friends or family, also known as love money, it is usually just to get your business off the ground. Chances are they do not have enough money to completely fund your business.

Tread carefully here. You wouldn’t want to ruin a relationship with someone you hold dear over something as silly as money.

Venture capital

Venture capital is where the big dogs come in.

This one is a little more confusing. It’s easier to explain when breaking it down into steps.

venture capital

Venture capitalists will always have their eyes on the prize. That prize being money. They will only help fund a business they are confident will provide a solid return on their investment. As they should. Funding an entire business is a big deal.

The good thing about venture capitalists is they typically have some good business insights to lend and booming networks to expose you to. If you are willing to give up a little equity and share the power, try to receive some funding from a venture capitalist.


This is when a hush falls over the crowd.

Crowdfunding is when you receive a small amount of money from a bigger number of people. This usually happens online, where you can easily communicate with large groups of people while also giving your business exposure.

It can be uncomfortable asking people for money. But if you don’t try, you will never know. You might be surprised to see how many people are interested in your business venture and willing to help fund it.

Angel investors

An angel investor is a wealthy individual who will give you the funding you need to start your business in exchange for equity. They can be just one person or a group of people who pull their money together. Angel investors are typically well versed in the business world, so they’re usually an excellent source of guidance.

This might seem a lot like venture capitalists, but they are actually different. Finding a random person willing and wealthy enough to fund your business is nearly impossible. This is why angel investors are usually somehow connected to the person looking for the money. In a way, the angel investor is putting their money into the person instead of the business.

If you are willing to give up a little bit of the control you have in your business, attempting to receive funds from angel investors is a good option.

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Bank loans

Bank loans are a popular option for business funding among business owners. There are a lot of different options for loans, and it is important that you educate yourself on the options before applying. Once you do decide on a loan you want to apply for, you will want to use loan software to manage that lifecycle and eliminate the need for a pile of paperwork.

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With bank loans, you don’t have to give up any ownership in your business and it is possible to get money pretty fast. However, the process can be a pain and the money has to be paid back no matter the success of your business.

Related: Learn how to get a small business loan and browse your options.


A grant is a non-repayable fund given to a business. It’s basically free money. Pretty great, right?

However, grants aren’t accessible for just any old business. The Small Business Administration works with a couple of different organizations to provide grants and other resources to certain small businesses. Learn more about them here.

Be aware that there is a lot of competition to receive these grants.


Bootstrapping is a funding tactic where you start your business with no money at all. It sounds hard to do, if not impossible.

Bootstrapping only works once the business gets rolling. Here’s how it works.


Bootstrapping does not include getting funding from any external source. The only way for a bootstrap business to be well funded is for them to get after it and, well, start doing business.

This one is for the fearless.

Funding is fun!

A business cannot start, grow, or be successful without sufficient funding. Luckily, there are quite a few options for businesses who need a little extra help getting things going and staying afloat. You just have to make sure you put those dollars to good use.

Looking for some easy ways to save cash for your business? Check out our resource on small business taxes for expenses you can deduct.

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