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5 Ways to Finance Your Business

Financing your business can be one of the biggest challenges about launching your idea off the ground. You can approach finances in many different ways depending on your business plan and idea. In some situations a business can be personally funded and in others it may require a lot more.

There are five basic ways to finance your business:

    • Debt: Credit lines and credit cards are common options for smaller financial needs. For larger amounts, you can apply for short or medium-term loans. The US Small Business Administration can also help small businesses receive approval for larger, long-term loans.
    • Equity: Equity is a percentage of your business (which you can exchange for money!). Investors are often friends and family, but they could also be angel investors or venture capital firms—investors who gamble on the future success of small businesses.
    • Crowdfunding: Websites like Kickstarter and Indiegogo are often used for crowdfunding. Basically, you present your pitch, and anyone who believes in your idea can choose to support it. Businesses often offer incentives to supporters, such as special deals or early access to a product.
    • Grants: Unlike loans, grants don’t have to be repaid. However, grants are difficult to get—they’re typically competitive, require proposals or applications, and have stringent rules for using funds.
    • Personal Funding: This may be the most obvious one in the group and can be a challenge, but personal funding may be a viable option for your business. If you are able to personally fund a startup without going into debt, it may be very beneficial. 


The best way to determine a way to finance your business is to evaluate your idea and your industry to see what fits best for you. If your idea requires large financing and you are having trouble getting it, don’t get discouraged, there are always more ways to finance your startup.

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