{"id":33691,"date":"2025-03-24T11:12:21","date_gmt":"2025-03-24T11:12:21","guid":{"rendered":"https:\/\/blogadmin.merch.vpsvc.com\/hub\/?p=33691"},"modified":"2025-03-24T11:12:27","modified_gmt":"2025-03-24T11:12:27","slug":"top-small-business-finance-options-how-to-get-funding-to-start-a-business","status":"publish","type":"post","link":"https:\/\/blogadmin.vpsvc.com\/hub\/top-small-business-finance-options-how-to-get-funding-to-start-a-business\/","title":{"rendered":"Top small business finance options: How to get funding to start a business"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Understanding how to get funding for a business is almost always one of the top <a href=\"https:\/\/www.vistaprint.com\/hub\/list-of-things-needed-to-start-a-business\" target=\"_blank\" rel=\"noreferrer noopener\">things needed to start a business<\/a>. That\u2019s because, in most cases, you can\u2019t start a business without funding.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, what are your small business financing solutions? Grants? Investors? Those are great sources of capital for business, but they\u2019re not the only small business finance options available. Many entrepreneurs use a mix of funding sources, including self-funding and crowdfunding. As you write your business plan, calculate how much money you need to launch\u2014and then aim for more than that. Unexpected costs always arise when starting a new business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Keep reading to learn about the different sources of funding in business, from investors to grants, and each of their pros and cons.<\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-tip\">\n    <div class=\"vp-custom-tip swan section__container\" role=\"alert\">\n        <div class=\"swan-px-8 swan-py-7 swan-display-flex span-justify-center tip-wrap\">\n            <div class=\"title swan-text-x2large swan-font-secondary\">\n                Key takeaways:            <\/div>\n            <div class=\"text\">\n                <ul>\n<li aria-level=\"1\">There are many ways to get funding for a business: self-funding, crowdsourcing, investors, loans and grants.<\/li>\n<li aria-level=\"1\">Each of the business financing options has its pros and cons, some of which can have long-term repercussions.<\/li>\n<li aria-level=\"1\">Generally, funding sources that provide higher monetary amounts have more stringent requirements for recipients.<\/li>\n<\/ul>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"types\">Types of business funding<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re wondering how to get funding to start a business, the answer is \u201cthere are a variety of ways.\u201d Some funding sources are more well-known, while others are more accessible, especially if you\u2019re a brand-new entrepreneur or don\u2019t have a high credit score. As you explore different funding sources, take note of their qualifications. Certain funding sources, like investors and loans, have rigid requirements like specific credit scores and data-supported revenue projections. Other financial solutions for small businesses have \u201csofter\u201d requirements, like the ability to write a compelling pitch or a willingness to serve a specific community.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img width=\"900\" height=\"600\" data-public-id=\"ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_600,c_scale\/f_auto,q_auto\/v1742813865\/ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg?_i=AA\" alt=\"Closeup of people negotiating at a table\" class=\"wp-post-33691 wp-image-33695\" data-format=\"jpg\" data-transformations=\"f_auto,q_auto\" data-version=\"1742813865\" data-seo=\"1\" data-responsive=\"1\" srcset=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_600,c_scale\/f_auto,q_auto\/v1742813865\/ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg?_i=AA 900w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_848,h_565,c_scale\/f_auto,q_auto\/v1742813865\/ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg?_i=AA 848w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_648,h_432,c_scale\/f_auto,q_auto\/v1742813865\/ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg?_i=AA 648w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_448,h_298,c_scale\/f_auto,q_auto\/v1742813865\/ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg?_i=AA 448w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_248,h_165,c_scale\/f_auto,q_auto\/v1742813865\/ideas-and-advice-prod\/blogadmin\/business-team-partner-working_336950a53d\/business-team-partner-working_336950a53d.jpg?_i=AA 248w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Source: Image via <\/em><a href=\"https:\/\/depositphotos.com\/photos\/funding.html?filter=all&amp;qview=302981692\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Depositphotos<\/em><\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Self-funding your business<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Obviously, self-funding a new business is the easiest choice, but it isn\u2019t plausible for most people.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s the best financing option for business owners who have a lot of capital, people who have a significant amount of money in their savings or those who have recently come into a lot of money, such as through inheritance or selling a home.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But that doesn\u2019t mean it\u2019s <em>only<\/em> for entrepreneurs with capital. There are a few ways you can fundraise for your business, like taking on a side hustle or offering your product or service at a small scale. For example, if you plan to launch an eyelash studio and need to raise funds for a security deposit and a new space, you can offer services in clients\u2019 homes to build up your bank.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img width=\"900\" height=\"600\" data-public-id=\"ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_600,c_scale\/f_auto,q_auto\/v1742813874\/ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg?_i=AA\" alt=\"Piggy bank with dollar bills\" class=\"wp-post-33691 wp-image-33701\" data-format=\"jpg\" data-transformations=\"f_auto,q_auto\" data-version=\"1742813874\" data-seo=\"1\" data-responsive=\"1\" srcset=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_600,c_scale\/f_auto,q_auto\/v1742813874\/ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg?_i=AA 900w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_848,h_565,c_scale\/f_auto,q_auto\/v1742813874\/ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg?_i=AA 848w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_648,h_432,c_scale\/f_auto,q_auto\/v1742813874\/ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg?_i=AA 648w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_448,h_298,c_scale\/f_auto,q_auto\/v1742813874\/ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg?_i=AA 448w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_248,h_165,c_scale\/f_auto,q_auto\/v1742813874\/ideas-and-advice-prod\/blogadmin\/piggy-bank-on-money-concept_33701cf3fa\/piggy-bank-on-money-concept_33701cf3fa.jpg?_i=AA 248w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Source: Image via <\/em><a href=\"https:\/\/depositphotos.com\/photos\/funding.html?filter=all&amp;qview=103140362\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Depositphotos<\/em><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Keep in mind that if you self-fund your business, you\u2019re the one taking on all the risk. If the business fails and the money runs out, it\u2019s gone. The flip side of this is that because you\u2019re the one providing 100% of the money, you retain 100% control over it\u2014there are no investors to pay back and no shareholders to keep happy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As you consider self-funding, also known as <strong>bootstrapping<\/strong>, note all the different funding sources you can use. If you have a high credit limit, you can use credit cards to your advantage\u2014just be sure to do so thoughtfully, as any credit card bills you rack up will need to be repaid with interest. Alternatively, if you have investments, you can liquidate these and use the funds as startup capital. You can also potentially borrow against assets, like taking out a home equity line of credit (HELOC) if you own a home.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Pros<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You have full control of the funds.<\/li>\n\n\n\n<li>There is nobody to pay back.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Cons<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>There is no \u201csafety net.\u201d<\/li>\n\n\n\n<li>You\u2019re limited to only the funds you can personally pull together.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Crowdsourcing funding<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Crowdsourcing<\/strong> has a few similarities to self-funding. Namely, with crowdsourcing, you\u2019re the one who raises the money, and ultimately, you have full control over it once it\u2019s time to make business purchases. The difference between self-funding and crowdsourcing is that with self-funding, the money typically comes directly from your own personal accounts, like your savings or investment accounts. With crowdsourcing, other people give you money to get started\u2014often in exchange for a freebie, early access to your product or some other kind of bonus.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img width=\"900\" height=\"900\" data-public-id=\"ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_900,c_fill,g_auto\/f_auto,q_auto\/v1742813895\/ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg?_i=AA\" alt=\"Graphic showing lots of faces and an upward arrow\" class=\"wp-post-33691 wp-image-33699\" data-format=\"jpg\" data-transformations=\"f_auto,q_auto\" data-version=\"1742813895\" data-seo=\"1\" data-responsive=\"1\" srcset=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_900,c_fill,g_auto\/f_auto,q_auto\/v1742813895\/ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg?_i=AA 900w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_848,h_848,c_fill,g_auto\/f_auto,q_auto\/v1742813895\/ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg?_i=AA 848w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_648,h_648,c_fill,g_auto\/f_auto,q_auto\/v1742813895\/ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg?_i=AA 648w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_448,h_448,c_fill,g_auto\/f_auto,q_auto\/v1742813895\/ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg?_i=AA 448w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_248,h_248,c_fill,g_auto\/f_auto,q_auto\/v1742813895\/ideas-and-advice-prod\/blogadmin\/human-faces-arrow-icons_3369948413\/human-faces-arrow-icons_3369948413.jpg?_i=AA 248w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Source: via <\/em><a href=\"https:\/\/depositphotos.com\/photos\/crowdsource.html?filter=all&amp;qview=56395153\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Depositphotos<\/em><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Platforms like Kickstarter and GoFundMe make it easy to crowdsource funding for a new business. Navigating these platforms can feel similar to navigating social media platforms, so you\u2019ll need to have eye-catching images and copy ready if you want your business to stand out among the sea of others seeking funding.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Part of catching and keeping potential pledgees\u2019 attention is offering them something in exchange for the funds, like early access to your service, a giveaway item or another promotional gift. This is where careful market research and a genuine understanding of your customer persona is key\u2014you need to offer people something they\u2019ll want so badly that they give your brand-new business their money.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Pros<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Crowdsourcing is inexpensive.<\/li>\n\n\n\n<li>Crowdsourcing can provide exposure and build brand recognition.<\/li>\n\n\n\n<li>No need to pay back investors.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Cons<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You\u2019re dependent on pledges\u2014if nobody pledges, you get no money.<\/li>\n\n\n\n<li>Funding amounts tend to be smaller than those raised through loans and investors.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Working with investors<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors are people who provide funds in exchange for a stake in your business. They can be individuals, groups or companies. There are different kinds of investors, and the type of investor that\u2019s best for you depends on a few factors, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The kind of business you\u2019re launching<\/li>\n\n\n\n<li>How much money you need<\/li>\n\n\n\n<li>What you\u2019re willing to offer in return for investments<\/li>\n\n\n\n<li>Projected revenue levels<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">An <strong>angel investor<\/strong> is an individual (sometimes a group) who provides funding for a business at its earliest stages. Generally, angel investors are experienced entrepreneurs, which means if you\u2019re seeking funds this way, you\u2019ll need to really prove your business plan\u2019s value to secure funding. This can be done through case studies, presentations and any data you\u2019ve collected about your product, market and business viability. Angel investors may be friends, family or other members of your community. They may also be strangers you find through internet searches and networking.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img width=\"900\" height=\"600\" data-public-id=\"ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_600,c_scale\/f_auto,q_auto\/v1742813884\/ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg?_i=AA\" alt=\"Photo of a woman at a desk looking at monitors\" class=\"wp-post-33691 wp-image-33703\" data-format=\"jpg\" data-transformations=\"f_auto,q_auto\" data-version=\"1742813884\" data-seo=\"1\" data-responsive=\"1\" srcset=\"https:\/\/res.cloudinary.com\/vistaprint\/images\/w_900,h_600,c_scale\/f_auto,q_auto\/v1742813884\/ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg?_i=AA 900w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_848,h_565,c_scale\/f_auto,q_auto\/v1742813884\/ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg?_i=AA 848w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_648,h_432,c_scale\/f_auto,q_auto\/v1742813884\/ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg?_i=AA 648w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_448,h_298,c_scale\/f_auto,q_auto\/v1742813884\/ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg?_i=AA 448w, https:\/\/res.cloudinary.com\/vistaprint\/images\/w_248,h_165,c_scale\/f_auto,q_auto\/v1742813884\/ideas-and-advice-prod\/blogadmin\/team-investment-working_33703ebb55\/team-investment-working_33703ebb55.jpg?_i=AA 248w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Source: via <\/em><a href=\"https:\/\/depositphotos.com\/photos\/investor.html?filter=all&amp;qview=279340882\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Depositphotos<\/em><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Venture capital firms<\/strong> are companies whose business model is investing in emerging and established businesses. Typically, they invest larger sums than angel investors and require higher returns on their investments. In many cases, a venture capital firm may specialize in investing in a specific type of business, like tech or healthcare startups. You can connect with venture capital firms through venture capital associations and private introductions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With both types of investor, you need to clearly demonstrate why investing in your business is in their best interest. A venture capital firm may have an established application process for businesses seeking funding, while an angel investor may take a less structured approach\u2014but in any case, you must provide clear data that shows how your business will grow, develop and earn money that you\u2019ll pay back to your investors. After securing funding, you may also be required to provide regular profit\/loss and growth reports. Your reporting schedule, the amount of money invested, the investors\u2019 returns and the schedule on which they\u2019ll receive them are all written into your investment contract, which may be drafted by a business attorney and properly notarized.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sometimes, investors offer money in exchange for equity in the company. Essentially, this means they own part of the business, and in the event the business closes, they are entitled to a portion of its liquidated assets.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Pros<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You and the investors are protected by a contract.<\/li>\n\n\n\n<li>In some cases, investors can provide valuable business guidance and advice.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Cons<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You are contractually required to pay investors back regardless of the business\u2019 performance.<\/li>\n\n\n\n<li>Investment is at the investors\u2019 discretion.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Business loans<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Business loans<\/strong> are a popular source of funding for new businesses. With a business loan, much like a mortgage or student loan, you borrow money and are then contractually required to pay it back, with interest, on a specific schedule.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Business loans can come from a variety of sources. These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Individual lenders<\/li>\n\n\n\n<li>Banks<\/li>\n\n\n\n<li>Governmental entities<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A loan\u2019s terms are determined by a variety of factors, such as the borrower\u2019s credit score and the type of lender they\u2019re working with. For example, borrowing money from an individual lender, rather than a bank, may mean borrowing at a higher interest rate. These terms are written into the loan\u2019s contract, and beyond the interest rate and payback schedule, they also include terms regarding early repayment and consequences for default.<\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-tip\">\n    <div class=\"vp-custom-tip swan section__container\" role=\"alert\">\n        <div class=\"swan-px-8 swan-py-7 swan-display-flex span-justify-center tip-wrap\">\n            <div class=\"title swan-text-x2large swan-font-secondary\">\n                Tip            <\/div>\n            <div class=\"text\">\n                <p>If you\u2019re facing difficulty qualifying for a loan on your own, you may be able to have a business partner, family member or friend co-sign a loan.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/section>\n\n\n\n<p class=\"wp-block-paragraph\">Taking out a business loan can be quite similar to working with investors. However, there is one key difference: With a business loan, the lender has no say in your business\u2019s operation. Business loans are also more straightforward than investor agreements; you borrow the money and pay it back as required. The lender gets no equity in your company, and once the loan is paid off, the relationship is over.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Pros<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Business loan debt is often dischargeable through bankruptcy.<\/li>\n\n\n\n<li>The lender has no stake in your business.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Cons<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You must have good credit and may need existing assets to put up for collateral to qualify for a business loan.<\/li>\n\n\n\n<li>If you default on a business loan, your credit score is negatively affected, and your assets may be seized.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Private and governmental grants<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A grant is like a loan, but with one key difference: You are <strong>not<\/strong> required to pay it back.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Grants are often used to stimulate business development. This is why they have stipulations about the kinds of businesses and business owners who qualify for them. Sometimes, the stipulation is that the business operates in a specific city or region, serving populations who previously couldn\u2019t access the product or service the business offers. Grants also have stipulations about how the money is used and require recipients to provide documentation that the money is being used for approved purposes, such as hiring local residents or buying energy-efficient equipment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Grants can come from private or governmental entities. The easiest way to find them is through online databases, like those <a href=\"https:\/\/quickbooks.intuit.com\/r\/funding\/small-business-grants\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">linked in this Intuit blog post<\/a>. Generally, the process for securing a governmental grant is the same as the process for a private one:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Apply for the grant. This often involves providing detailed information about your business and plans regarding the funds.<\/li>\n\n\n\n<li>Undergo an evaluation by the granting agency.<\/li>\n\n\n\n<li>If approved, the grant money is disbursed on a predetermined schedule.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Grant recipients are required to document their use of the funds and share this information with the grant issuer. Failure to do so can cause the grant to be canceled.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Pros<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Money does not need to be paid back.<\/li>\n\n\n\n<li>There are lots of grant opportunities available.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Cons<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recipients must maintain and submit detailed records of funds usage.<\/li>\n\n\n\n<li>Finding and applying for grants can be a long, tedious process.<\/li>\n\n\n\n<li>Grants are extremely competitive.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"real\"><strong>Real Talk: How entrepreneurs secured funding to start their businesses<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding the different small business finance options is one thing\u2014actually securing funding is another challenge entirely. To bridge the gap between theory and real-world experience, we spoke with entrepreneurs about the strategies they used to get funding to start a business. From self-funding to investors, here\u2019s what we learned from their journeys:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Starting small can lead to big success<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Many business owners begin with minimal capital and scale gradually as revenue grows.\u00a0<\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-blockquote\">\n    <div class=\"vp-custom-blockquote swan section__container\">\n        <blockquote class=\"swan-text-left\">\n            <div class=\"swan-text-x3large swan-font-secondary swan-ml-5\">\n                &#8220;My sister and I initially started our business by spending a couple hundred bucks on a Cricut, which is a cutting machine, and just using the printer we already had.&#8221;            <\/div>\n\n                            <p class=\"swan-text-black swan-text-xm3 swan-mt-4 swan-ml-5\">\n                    \u2013 Ashley, amarieacreates                <\/p>\n                    <\/blockquote>\n    <\/div>\n<\/section>\n\n\n\n<p class=\"wp-block-paragraph\">Starting lean helps to avoid unnecessary debt and keep cash on hand. It also offers the flexibility to reinvest profits and shows future investors that the business can manage money wisely.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Financial discipline is key<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Careful budgeting and resource allocation will help entrepreneurs stretch their initial funds.<\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-blockquote\">\n    <div class=\"vp-custom-blockquote swan section__container\">\n        <blockquote class=\"swan-text-left\">\n            <div class=\"swan-text-x3large swan-font-secondary swan-ml-5\">\n                &#8220;I worked a horse farm on the side, weeding the gardens, loading hay after work, after my main salary job, and set a really strict budget, like $25 a week for food.&#8221;            <\/div>\n\n                            <p class=\"swan-text-black swan-text-xm3 swan-mt-4 swan-ml-5\">\n                    \u2013 Michael, WildFlora                <\/p>\n                    <\/blockquote>\n    <\/div>\n<\/section>\n\n\n\n<p class=\"wp-block-paragraph\">This level of discipline not only extends the small business owner\u2019s runway but also shows potential backers that they can manage money under pressure\u2014a key trait investors look for.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Leveraging savings and safety nets<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Many business owners tap into personal savings or <strong>create a financial cushion<\/strong> before leaving traditional jobs.<\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-blockquote\">\n    <div class=\"vp-custom-blockquote swan section__container\">\n        <blockquote class=\"swan-text-left\">\n            <div class=\"swan-text-x3large swan-font-secondary swan-ml-5\">\n                &#8220;I took the opportunity to leave corporate America, tapped into the savings I had and set up a safety net.&#8221;            <\/div>\n\n                            <p class=\"swan-text-black swan-text-xm3 swan-mt-4 swan-ml-5\">\n                    \u2013 Karen, Kanda Chocolates                <\/p>\n                    <\/blockquote>\n    <\/div>\n<\/section>\n\n\n\n<p class=\"wp-block-paragraph\">By building a safety net first, small business owners can reduce the need for risky, high-interest loans early on and position themselves as a lower-risk candidate when seeking outside funding later.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The experiences of these entrepreneurs show that business financing options vary widely, but the key is to start with what you have, budget carefully and explore multiple funding sources.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Check out Episode 6 of our Real Talk series, <em>Getting started and funding your small business<\/em>, to get first-hand insights into <a href=\"https:\/\/www.vistaprint.com\/hub\/how-to-start-a-business\" target=\"_blank\" rel=\"noreferrer noopener\">how to start a business<\/a>:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Getting started and funding your small business | Real Talk with small businesses\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/6redT6bXCBg?feature=oembed&#038;rel=0\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"ready\">Now you\u2019re ready to request funding and write a business plan<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Now that you know how to get funding for a business, you should pick two or three funding methods that work best for you. Once you\u2019ve determined which kind of funding you\u2019ll seek, the next step is to <a href=\"https:\/\/create.vista.com\/blog\/how-to-write-a-business-plan\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">write a business plan<\/a>. This is the baseline you\u2019ll need when seeking any type of funding. Other documents to prepare include an engaging pitch deck and a well-rehearsed pitch you can present to investors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another <a href=\"https:\/\/www.vistaprint.com\/hub\/things-to-know-before-starting-a-business\" target=\"_blank\" rel=\"noreferrer noopener\">thing to know when starting a business<\/a> is that you need to be transparent with potential lenders and <em>yourself<\/em> about figures like your current debt level, business experience, projected income and current market. If you can\u2019t provide detailed, accurate figures for these right now, do the necessary research and reach solid figures before you seek funding. You will be asked about these, especially if you\u2019re seeking a bank loan, grant or investor involvement.<\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-tip\">\n    <div class=\"vp-custom-tip swan section__container\" role=\"alert\">\n        <div class=\"swan-px-8 swan-py-7 swan-display-flex span-justify-center tip-wrap\">\n            <div class=\"title swan-text-x2large swan-font-secondary\">\n                Tip            <\/div>\n            <div class=\"text\">\n                <p>Check out our <a href=\"https:\/\/www.vistaprint.com\/hub\/checklist-starting-business\" target=\"_blank\" rel=\"noopener\">business start-up checklist<\/a> for more step-by-step guidance.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"funding\">Funding is the first step in starting a business<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">As a small business owner, getting enough funding can be the difference between launching now and having to put your dreams on hold for months or even years longer. Invest in your future by exploring all your funding options now to find the right opportunity for your business. You may find that the best way to fund and launch is through multiple streams, like partially self-funding and partially crowdsourcing. That\u2019s totally okay! The important part is that you get enough money to launch successfully and start generating revenue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>As you explore funding options, don\u2019t neglect other resources and steps to take early in your entrepreneurial journey. Check out this post on the <\/em><a href=\"https:\/\/www.vistaprint.com\/hub\/5-steps-to-starting-a-business-with-confidence\" target=\"_blank\" rel=\"noreferrer noopener\"><em>five steps to starting a business with confidence<\/em><\/a><em>.<\/em><\/p>\n\n\n\n<section style=\"background-color: #FFFFFF\" class=\"section section-vp-custom-design-cta-block\">\n    <div class=\"vp-custom-design-cta-block swan swan-custom-cta-block px-6 swan-py-4 section__container\" role=\"alert\">\n        <div class=\"swan-px-8 swan-py-3 swan-display-flex span-justify-center\">\n            <div class=\"swan-mr-4\">\n                <div class=\"swan-text-x3large swan-text-black swan-font-secondary swan-mb-5\">\n                    Get your business strategy fine-tuned and check out all the marketing materials you\u2019ll need along the way.                <\/div>\n\n                <div class=\"swan-text-black swan-text-xm1 text-description\">\n                    Market your business                <\/div>\n            <\/div>\n\n                            <div class=\"vp-custom-design-cta-block-button\">\n                    \n<a href=\"https:\/\/www.vistaprint.com\/marketing-materials\"\n   title=\"Let\u2019s go!\"\n   target=\"_blank\"\n   class=\"swan-button swan-button-skin-primary\"\n    data-tracking-event=\"Navigation Clicked\" data-tracking-event-detail=\"\/hub\/wp-json\/wp\/v2\/posts\/33691;https:\/\/www.vistaprint.com\/marketing-materials;Content:Text Link;Let\u2019s go!\" data-tracking-navigation-detail=\"Let\u2019s go!\">\n    Let\u2019s go!<\/a>\n                <\/div>\n                                <\/div>\n    <\/div>\n<\/section>\n\n\n<h2 class=\"wp-block-heading\" id=\"faq\">FAQ about small business finance options<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">What are some common ways to get funding for a new business?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">There are several ways to get funding for your new business:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Savings: <\/strong>Use your own money that you\u2019ve saved up.<\/li>\n\n\n\n<li><strong>Loans:<\/strong> Borrow money from banks or online lenders that you will pay back with interest.<\/li>\n\n\n\n<li><strong>Investors:<\/strong> Find people who want to invest in your business in exchange for a share of the equity.<\/li>\n\n\n\n<li><strong>Grants:<\/strong> Apply for free money from the government or organizations that you don\u2019t have to pay back.<\/li>\n\n\n\n<li><strong>Crowdfunding:<\/strong> Raise small amounts of money from many people through online platforms.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">How do I know which type of funding is right for my business?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">To choose the right funding, consider these factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Amount needed:<\/strong> How much money do you need? Some methods, like loans and investors, can provide large amounts.<\/li>\n\n\n\n<li><strong>Repayment ability: <\/strong>Can you pay back a loan? If not, grants or investors might be better.<\/li>\n\n\n\n<li><strong>Business stage:<\/strong> New businesses might start with savings or crowdfunding, while established ones might seek loans or investors.<\/li>\n\n\n\n<li><strong>Control: <\/strong>Do you want to keep full control of your business? If so, avoid giving away equity to investors.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What are the easiest small business funding options to qualify for?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re just starting out and don\u2019t have savings, some of the easiest funding options to qualify for include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Crowdfunding<\/strong>: Platforms like Kickstarter or GoFundMe let you share your idea and raise small contributions from a large group of people. You don\u2019t need great credit or collateral\u2014just a strong pitch.<\/li>\n\n\n\n<li><strong>Small grants<\/strong>: Some local governments, nonprofits and industry groups offer grants for new businesses, especially if you\u2019re in a specific niche or underrepresented group. These don\u2019t need to be repaid.<\/li>\n\n\n\n<li><strong>Microloans<\/strong>: These are smaller loans (usually under $50,000) commonly offered by nonprofits, community lenders and the U.S. Small Business Administration. They often have more flexible requirements than traditional banks.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">How can I find investors for my business?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Finding investors involves:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Networking:<\/strong> Attend business events, join entrepreneur groups and connect with people who might be interested in investing.<\/li>\n\n\n\n<li><strong>Pitching:<\/strong> Prepare a clear and convincing presentation of your business plan and how it will make money.<\/li>\n\n\n\n<li><strong>Online platforms: <\/strong>Use websites that connect startups with potential investors.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What documents do I need to apply for small business funding?&nbsp;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">To apply for small business funding, you\u2019ll typically need a few key documents:<br><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A business plan<\/li>\n\n\n\n<li>Financial statements (like profit and loss or cash flow projections)<\/li>\n\n\n\n<li>Your credit report<\/li>\n\n\n\n<li>Legal documents such as your business license or registration\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Some lenders may also ask for tax returns or bank statements.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s a good idea to check the exact list with the lender ahead of time\u2014requirements can vary depending on the type of funding you\u2019re applying for.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Are grants a good small business financing option?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, grants can be a great option because they don\u2019t need to be repaid. They\u2019re competitive, but if you qualify, they offer free funding that can help you start or grow your business without taking on debt.<\/p>\n\n\n\n","protected":false},"excerpt":{"rendered":"<p>Understanding how to get funding for a business is almost always one of the top things needed to start a [&hellip;]<\/p>\n","protected":false},"author":184,"featured_media":33697,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"How to Secure Funding for a Small Business | VistaPrint US","_seopress_titles_desc":"Learn about small business finance options and real funding stories from entrepreneurs. 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