Startup Financing Options to Fund Your Growing Business

Silent Rich’s comprehensive guide to startup funding and business financing options will help you explore the right funding options for your unique situation, whether you are a first-time entrepreneur or a seasoned executive.


Before you begin your business, it’s essential to prepare. The first and most important step is to create a detailed business plan. This will help you get financing from investors and lenders. Include details about your product or service and your goals for the future in your plan. Be sure to also create a budget for start-up costs and ongoing expenses.

If you plan to borrow money to fund your business, you may want to build equity financing as well. This will ensure that you have an appropriate amount of debt and equity in your company.

Personal Credit Lines

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Angel Investors

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Venture Capitalists

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Business Loans

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Government Grants

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The world of startup funding can be a daunting one, especially when traditional business loans require one or more years in business.

Using Your Own Money & Credit Lines

When starting a new business, using your own personal savings and available credit lines can be a great way to initially get the business off the ground without having to give up equity or commit to repayment plans.

Another advantage to starting a business with a limited budget is the chance to learn frugality, which can lead to better spending habits as income, credit lines, and investment capital later increase.

When possible, it’s recommended that you take this route for as long as you can comfortably afford and it makes sense to do so.

Apply For Business Loans

A more straightforward way to finance your startup is to apply for a small business loan, but be prepared to submit detailed financial records and have a good credit history.

As you search for lenders to secure a loan through, it’s important to be upfront about your business strategy and how investment money will be used.

You can apply for a loan with:

  • Banks are a good option for people who have collateral and good credit, and who don’t need immediate access to cash.
  • Nonprofit Microlenders can provide small loans to startups and small companies that have been turned away by traditional lenders.
  • If you do not have collateral and need funds as soon as possible, you may apply for a loan from an online lender.
  • The Small Business Administration (SBA) is a government organization that helps fund loans for small businesses. Lenders working with the SBA often provide longer repayment periods for their clients’ loans.

Business term loans are a type of financing that can be used to pay for one-time investments in your business.

Before applying for online financing, writing a business plan is a good idea. Your business plan should include: financial statements, growth plan, mission statement, product and service descriptions and biographical information about the company’s leadership and staff.

Friends & Family

In the early stages of a startup, finding the right funding option can be stressful. Friends and family can be helpful sources of financing.

When borrowing money from personal relationships, you can often pay lower interest rates than you would at a bank. This can help reduce your overall debt level so that you have more cash to invest back into your business. However, it’s important to be aware that conflicts may arise when borrowing from friends or family members.

Securing an Angel Investor's Attention

Private investors can provide startups with the capital they need to get off the ground, but that funding comes with strings attached.

Angel investing is an arrangement in which an investor gives you funding in exchange for equity in your company. As a condition of the investment, the investor will often want to be involved in business decisions, and will be entitled to a percentage of proceeds if you sell your company.

In order to convince investors that you are capable of turning a profit, it is important to clearly outline your business plan. This includes the market opportunity for your products, as well as the potential for your company’s growth. Along with this, be sure to fully understand your marketing and PR strategy, as well as your startup’s financial numbers.

Start Setting Meetings with Venture Capitalists

As private investors, Venture capitalists are in the business of funding startups that they believe will potentially lead to a high multiple return in a future exit. Typically, venture capitalists invest in a limited partnership and make investment decisions through a management company called a commission.
Once a group of investors has decided to back a startup, they give money to the startup in exchange for a stake in the company’s equity. The members of this group usually look for startups that have launched their product or service and are ready to be scaled.
A few important things to keep in mind when preparing for VC meetings:

Launch A Campaign On A Crowdfunding Website

When cash flow is tight or your company’s working capital needs to be improved, a crowdfunding campaign can help. These initiatives typically are held online on popular platforms, such as Kickstarter and GoFundMe, and raise small amounts of money from a large number of people.

To succeed at crowdfunding, try these tips:


Government Grants and Subsidies

Government business loans and grants are available for any business, but there are many options to consider. As example, some programs focus on specific industries or demographics, others support women-owned businesses.
Some grants have been established to encourage minority businesses, or to help develop enterprise zones—areas in which the government wishes to foster economic growth. The government wants these locations to become more economically viable.

Startup Incubators & Accelerators

Startup incubators provide facilities, support and expertise to early-stage companies. You’ll get access to mentors and the tools you need to succeed while there, including expertise, seed funding, development resources, and often collaborative access to other startups within their program.
When researching startup incubators, it’s beneficial to speak with other founders who have been through the process. They can give you a better sense of whether you’ll be a good fit.

Use Peer-to-Peer Lending To Fund Your Business

Another option for financing a startup company is through peer-to-peer lending. Peer-to-peer platforms connect businesses seeking loans with business people or investors looking to lend.