8 Best Ways to Fund Your Business

You have an entrepreneurial spirit and an incredible idea, so there is just one thing standing in in the way of exceptional business success: money. Fortunately, there are many different ways to find funding for a startup venture. Most likely, you will need to utilize multiple funding sources to earn the capital you need to launch your business, so you might explore some of the most common and most effective methods of earning funding:


If you have a flashy business idea that is immediately appealing to your target audience, you may be able to find startup funding through crowdsourcing. Crowdfunding involves taking a large number of small investments from the public, who is likely to benefit directly from the launch of your venture. It is a mistake to believe that crowdfunding is easy or free; you will need to be aggressive in marketing your campaign, and you may lose a significant chunk of your funding to the platform you use to collect and organize payments. Still, this type of by-the-people-for-the-people funding can make entrepreneurial dreams come true.


Similar to crowdfunding, offering product pre-sales is a way to generate funding by tapping into the financial power of your target audience. What’s more, pre-selling products is a good way to gauge the interest of your audience in your goods and provide more practical order estimates to your supply chain. However, before you start a pre-sale, you need to be certain that you can deliver your products within a specific timeline; otherwise, your customers will become dissatisfied with your company and your brand reputation will never recover.

Angel Investors

Angel investors are magnanimous individuals who can give you tens of thousands of dollars up to millions of dollars to fund your startup — in exchange for equity, of course. Often, these investors will strive to develop a close relationship with you and other members of your business leadership team, even taking on a mentorship role to help guide the idea to success. Some entrepreneurs are less interested in angel investment because of the loss of company equity, but if you are brand-new to entrepreneurship, angel investment comes with major benefits and relatively few strings.

Venture Capitalists

Like angel investors, venture capitalists (VCs) are constantly looking for businesses with a high potential for growth, and like angel investors, VCs tend to take a share of equity in exchange for investment. While VCs tend to have much more money to put into a business, they also tend to be much warier of startups. Unless you already have a well-known name as a successful entrepreneur, you probably won’t be able to secure VC funding for your brand-new business.

Small Business Loans

If you are wondering what are small business loans, you aren’t alone. Many entrepreneurs have mistaken ideas regarding what business loans are and how they function. In truth, it can be somewhat difficult to secure startup funding through loans, but if you have a good credit score, a strong business idea and little interest in sharing company equity, loans could be a viable option for you.


As the name suggests, microloans are small loans — less than $50,000. Most often, microloans are utilized by non-profit organizations, which tend not to qualify for traditional business loan options. However, you might look into microloans if you have remarkably low operating costs.

Purchase Order Financing

Similar to pre-sales but relying on lenders instead of customers to supply the funding, purchase order financing involves taking an advance in payment on purchase orders that have yet to be fulfilled. Often, seasonal businesses will utilize purchase order financing as they need money to purchase materials for orders they are certain will arrive during the upcoming season. Purchase order financing organizations might be wary to work with a startup, and this method of funding will only be useful to you if you benefit from a margin of 20 percent or more on your sales.

Personal Financing

Personal financing is the process of taking out personal loans to fund your business. Admittedly, this is a risky funding path because it makes you personally liable for the loan; if your business idea does not succeed, you will still need to repay the loan using whatever personal assets you have, such as your car or your home. For this reason, many traditional lenders will refuse to give you a personal loan knowing it is for a startup opportunity.

It takes money to make money — and fortunately, there are many different ways for you to get the money you need to launch your business.