Building Your Business Business Financing How To Get Money To Start a Business Where To Get Business Start Up Funding By Susan Ward Susan Ward Twitter Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses. learn about our editorial policies Updated on September 13, 2022 Fact checked by Hilarey Gould Sponsored by What's this? & In This Article View All In This Article Dip Into Your Personal Finances Ask Family and Friends Apply for a Line of Credit Apply for a Business Loan Government-Sponsored Organizations Find Investors Government Grant Programs Best Way To Get Money for Your Business Frequently Asked Questions (FAQs) Photo: JGI/Tom Grill / Getty Images So you've got a killer business idea and want to start a business. How and where do you get the money to fund this venture? Your own savings is one place to start, but if that's not a viable option, you have others to consider. From family and friends who are willing to invest and support you, to business loans or grants, here's how to get money for your small business. Key Takeaways To get money to start a business, you need to look at your own personal finances first to see if you have enough to fund it, or if you need to seek money elsewhere.If you're going to ask others for money—whether family and friends or a lender—you'll want to have a good business plan to show them so they understand what the money is going toward.Once your business is up and running, you may be able to reinvest the profits into the business to keep growing it. Dip Into Your Personal Finances It may be scary at first to think about taking a large chunk of your savings and putting it toward a business, but it's a great first place to start—as long as you can swing it (you'll still want an emergency fund in place in case things go south). Don’t have a nest egg? You could take out a home equity loan, downsize to a smaller house, or sell property or possessions. This is something entrepreneurs may do even after they succeed in getting a start-up business loan. Ask Family and Friends The second most popular source to get money to start a business is family and friends who are often willing to provide a loan or make an investment in your new company. If they're the kind of people who support you in your life, they're sure to at least entertain the idea of lending of giving you money to help you succeed. Note If asking friends and family for money isn't a comfortable option, you can always host a fundraiser of some sort, where they can "donate" the money to you for your business. Apply for a Line of Credit While not recommended as a sole source of start-up money, a line of credit is essential for the start-up phase. No matter how careful and detailed you’ve been in preparing your business plan, there are always unexpected expenses or expenses that you’ve underestimated. Hopefully, you've already prepared the way to access this source of funds before you decided to start a business by having established a relationship with your local bank manager and by ensuring that your credit rating is in good shape. A business line of credit could be as small as $10,000 or as large as $500,000, so you'll want to be prepared to ask for how much you need. Note A business credit card may also be a wise option as you can apply for ones with low introductory rates, rewards, and other benefits that could help your business. Apply for a Business Loan You can apply for a business loan at traditional banks and credit unions, and other online lenders. It’s actually pretty easy to get a business loan from these sources. Many big banks, like Bank of America, Wells Fargo, and Chase offer small business loans and funding options. You may need to have a relationship with the bank already (such as a checking account or savings account), and that may even give you more options and benefits. That said, you can't just walk in, tell a loans manager how much money you want, and expect to walk out with it. Applying for any business loan is a process that you need to prepare for. For example, at Chase, you'll need to schedule a meeting. Then, you'll want to prepare a winning loan presentation to get the business start-up funding you need. Loan or Grant From a Business-Related or Government-Sponsored Organization There are many organizations whose purpose is to promote economic development or provide assistance to help particular types of people succeed in business. Often (but not always) this assistance includes financial support, such as start-up business loans. In the U.S., the Small Business Administration (SBA) guarantees small business loans of several types. The microloan program, administered through community-based non-profits, provides loans of up to $50,000 for working capital, inventory, equipment, or starting a business. The SBA's 7(a) loan program also provides small business funding through loans of up to $5 million dollars through banks and credit unions. These funds are for working capital, expansion, and/or equipment purchases. Many women’s and government-sponsored organizations also provide financial assistance including money for women in business. Some banks also offer grants to women in business. For example, BMO Harris Bank offered eight women grants of up to $10,000 for their small businesses in 2021. Note There may be centers located near you that you can visit to gain advice and guidance on how best to find the money for your business. For example, the Minority Business Development Agency (MBDA) has business centers located throughout the U.S. for minority-business owners to utilize to find funding, learn how to grow and scale, and more. Find Investors Angel investors, venture capitalists, or private investors may be excellent funding sources for your new business. While it’s certainly more difficult in most cases to attract investors to a start-up rather than to an established venture, it’s not impossible if you have the right business idea at the right time backed by an impressive business plan. Government Grant Programs While there are government grants available, finding one that can provide start-up money for your new business may be a challenge. That's not to say you shouldn't look for them to get the money for your business. Government grants are typically available for entrepreneurs who are starting businesses that align with particular activities the government wants to encourage. For example, generating efficient, renewable energy is a priority of the federal government, so businesses involving renewable energy technologies may find more government grant opportunities than others. So What's the Best Way To Get Money for Your Business? You'll likely need a combination of funding sources to get the money you need to develop your business. You may even want to explore all of the resources listed above. Whatever you do, don’t depend on your personal credit cards for the business start-up money you need. It’s best to wait to start your business until you have the funds you need in place rather than potentially damaging your credit or your personal finances. Consider speaking with a financial advisor before making any decisions. Frequently Asked Questions (FAQs) How do you get grant money for a small business? Before applying for a grant, you'll need to make sure you're eligible to apply. If you are, you'll need to prepare the application with the materials the grant asks for. You may need to outline the business plan, how the money will be used for the business, and more. How can you raise money for a small business? To raise money for a small business, you'll want to create a proposal to show investors and others who may give you money. You can also use online resources like Kickstarter or GoFundMe to raise money for your small business through online crowdfunding. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Chase. "Chase Business Line of Credit." Bank of America. "Small Business Loans & Financing." Wells Fargo. "Small Business Credit." Chase. "Small Business Loans." U.S. Small Business Administration. "Microloans." U.S. Small Business Administration. "7(a) Loans." BMO Harris Bank. "Women in Business." Minority Business Development Agency. "MBDA Programs." Energy.gov. "Funding & Financing for Energy Businesses." Grants.gov. "How To Apply for Grants." Kickstarter. "About." GoFundMe. "About GoFundMe."