9 Ways to Finance Your Business When You Don’t Want to Ask Family Or Friends


You have a great business idea that you’re certain will explode once it hits the market. Unfortunately, if you don’t have any capital to get you started, your dream may never become a reality.

While the situation may seem bleak, keep in mind that you can find plenty of ways to fund a startup that don’t involve asking family and friends for donations. By investigating the market and finding a solution that meets your needs, you’ll be on your way to entrepreneurial stardom with the following nine methods to finance your business.

Credit Cards

If you don’t need a large amount of capital to get started launching your business, then using credit cards to help pay the upfront bills may be a good option. You can use credit cards to pay for products, get a cash advance, or pay for the first month of rent at your new office. Even better, you may earn bonus points or rewards on all your purchases which you can reinvest in the business.

However, be careful when using credit cards, as interest rates can be quite high. If you don’t think you’ll be able to pay off your bills in a few months, consider using another funding option.

Angel Investors

Image via Flickr by franchiseopportunitiesphotos

Rather than dealing with banks and complicated loans, you may be able to find someone who is willing to help finance your business directly. Known as angel investors , these wealthy individuals are often entrepreneurs themselves who have been successful in their ventures.

Often, angel investors are looking to invest in new startups to help further their own incomes. They may also be in the business to help give back to other entrepreneurs struggling to get started. In return for their generosity, you’ll give them an equity share of your business and potentially some decision-making power.

SBA Microloan Program

The U.S. Small Business Administration (SBA)  is well-known for distributing loans to entrepreneurs. Generally, you can apply for these types of loans after being denied by a bank or credit union for other loans. You’ll also need to meet special criteria or qualifications, such as meeting the federal government’s definition of a small business.

Next, you’ll have to apply directly with a commercial loan provider, as the SBA doesn’t provide direct loans to business owners. A micro loan can range anywhere from $500 to $50,000.


You’ve likely heard of websites such as Kickstarter and perhaps you contributed a few dollars to projects that piqued your interest. Now it’s your turn to raise money by using this form of public outreach.

Create a campaign that will speak to and motivate potential customers. Make sure any incentives you are providing are worthwhile and fun for those who donate. If you’re not a fan of using a website for crowdfunding, you can try hosting in-person fundraisers where you can talk about your ideas and gather donations.

Working Capital Loans

Getting a working capital loan can be a great way to finance the everyday operations of your business without making any sacrifices. These loans give you enough funds to cover operating expenses, which gives you time to increase your revenue streams.

Online lenders such as Kabbage can offer working capital loans to entrepreneurs  based on a company’s current assets to help them afford their liabilities.

You can choose from several different types of working capital loans, such as bank overdraft facility, short-term loans, equity funding, accounts receivable loans, or advances. Working with an online lender such as Kabbage can be easier than working with a traditional loan provider, as traditional providers typically require more valuable collateral.


A safer bet than emptying out your 401(k), below, may be to tap into your regular savings. If you don’t have any money to work with immediately, try waiting a few months to save as much money as possible.

While you may not be able to get all the money you need, even if you can save a few thousand dollars, you’ll be able to save money on interest or equity shares in the future. If you’re feeling lucky, you may want to try getting a home equity line of credit.

Venture Capitalists

Similar to angel investors, venture capitalists are firms or companies dedicated to investing in businesses. These companies will also offer you money to start your business in exchange for an equity share or percentage of ownership.

You  may have more bargaining room with venture  capitalists as you’ll be able to make pitches to several different firms to see what kind of funding they can offer you. You can also choose a few different investors if you’re lacking startup funds.


If your clients or customers are slow to pay and you need cash now, you can go through a process known as factoring. Through this process, you’re submitting  invoices to your clients or customers. You also submit these invoices to a factoring company, which will give you an advance of about 80 percent of the invoices. Then, when your clients or customers pay the invoices, you’ll receive a rebate of 20 percent from the factoring company, minus the fees involved for the services.

While factoring means that you earn less on your sales, sometimes having the cash available to use immediately is worth the added costs.

401(k) Funds

While this area should come as a last resort, you may be able to tap into your 401(k) funds to get capital for starting your business. If you follow certain procedures, you may be able to do so without any penalties or taxes. You’ll need to get help from a tax or accounting professional who has dealt with C-corporation issues in the past. However, keep in mind that taking away money from your retirement fund could be life-altering if your business doesn’t blossom as planned.

Whether you choose one or more of the options presented above to fund your business, you’ll be able to take pride in the fact that you didn’t have to beg for money from any of your friends and family.