Resources for Funding: Finding Money to Start Business

Businesses need money to start and grow: Maybe you need an initial infusion of capital or you need a little something to smooth out the bumps or take you to the next level. Here are some ideas to help you find the money you need to build your business...

One of the things that kept me from becoming an entrepreneur earlier than I did was money. Of course, at the time I was twelve and selling lemonade at a stand wasn’t cool anymore, but I just couldn’t seem to get an appointment at a bank for a large business loan!

If you want to build your business, perhaps it’s money holding you back. You’ve probably heard that most businesses fail in their first year and one of the suggested reasons (among the many theories out there) is that growing businesses just don’t have the financial infrastructure to keep up with their growth.

Don’t let that become a problem for you. Here are some ways to help your new or growing business get money.

Banks. Banks are the traditional way to get a loan. Your credit and financial stability, as well as the kind of business you’re planning on starting can all be determining factors. Going to a bank can be difficult and daunting, but if you want good capital, it should be considered. You should make sure that you have thoroughly researched your industry and opportunity and you should also get your proposal professionally written. Download a business plan from then get a business proposal professionally written from an experienced writer at sites like and

Friends and family. This is another traditional way of getting money for your business. It can be a good idea, or it can be a very bad idea. Basically, it all comes down to how well you communicate with each other. Don’t accept money from family or friends who you’re even slightly concerned will want to come in and take over the business. Clearly outline the expectations (probably that they provide the money and you provide the management) and outline your anticipate repayment period. Absolutely don’t shake hands on a financial arrangement for your business. Get it in writing! Tragically, many friends and family have become strangers because of disagreements and misunderstanding over money.

Loans. Periodically you hear stories about someone who took a second mortgage out on their house to build their business or funded their start-up entirely from credit cards. Although I don’t go around suggesting that to people, I firmly believe that if you have the conviction that your business is going to succeed and you have the willpower to wrestle it toward success, then this might be an option to consider. Before charging up your Visa or MasterCard, consider a secured loan first (like a second mortgage or a Home Equity Line of Credit). These are cheaper to get and have better repayment terms because they have an asset guaranteeing the loan.

Start smaller. If banks, family, and loans are not an option for you – which is the case for many people – you may want to consider another option: start smaller. For entrepreneurs, the excitement of starting a business is almost overwhelming and most entrepreneurs want to move full bore into their business. One solution is to start smaller. Consider moonlighting first, and putting in some personal overtime to see that your business grows. It will grow much more slowly than you really want, but it’s a financially sound solution. If moonlighting is not an option, consider selecting only two or three of your products or services – the ones you consider to be your most popular – and start with those. That way, you’ll keep your warehousing costs down as you get started. But, as you grow, you can add more lines to your store.

Kick in the wall. Once, a friend was visiting and I was showing him around my new house. I was doing a little remodeling and told him that I had been procrastinating on a particularly daunting task of tearing down a wall. Impetuously, he swept his foot back and slammed it through my wall. After I told him that I thought he was crazy, he asked me if I was more likely to put aside my procrastination and tear down the wall. I admitted he was right, and that weekend I did it. It taught me a valuable lesson: sometimes you just have to go out and do it and see what happens. Sometimes, you need to throw caution to the wind, forget where the next paycheck is coming from and get your business started full bore. It doesn’t always work and it can lead to disappointment. I know one business owner who “kicked the wall” once and started his business, only to have it fail in its second year. He picked himself up, worked off his debts, and “kicked the wall” again four years later. This time, he was very successful!

Not every solution is going to be right for every business owner. Choose two or three that are realistic for you and put a plan in place now – even before you take action – to make sure that it’s a viable alternative for you.

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