How to Finance a Business

When you are looking to start a business, chances are you will need money to get it going. How much money you need is going to make a big difference in your being able to get it started. If you need more money than what you have yourself, there are some other options that you can explore to help you with starting that business.


If you have already dug as far into your pockets as you can, you likely will want to check with your family and friends. Depending on how much you need, you may be able to get the entire amount from here. Set it up as a business transaction with an agreement written out including how much you owe them as well as interest and payment terms. This will save any headaches down the road if there are disagreements.

Line of Credit

Depending on your business idea and your personal finances, you may be able to get a line of credit to get you started. Even if you are able to find the money in other locations, it is not a bad idea to have a line of credit as chances are you are going to incur expenses you were not expecting. If you already have a line setup, then you are ready to go as you can borrow from it right now and get going.

Bank Loan

The next source of a business loan is going to the bank or any other lending institution. Be prepared to do some legwork if you are looking at this source to help you finance your business. Many places will require a business plan from you that they will use to consider your application. Even if you do not need to borrow money from the bank, a business plan is a good idea to have. Spend some time on your business plan doing the research and getting proper numbers as the bank will make their decision based on your research and their own information.

Other Agencies

Even if the bank turns you down, or if they are not able to give you enough capital for what you need, there are other resources out there. You can find government agencies that are designed to help small businesses get started. Different agencies assist different demographics so you may find some that help younger people, some that help only women and others that are helping anyone who did not qualify for a bank loan but is starting a business in a specific area. Finding these agencies can be harder, but they can be well worth it.

Private Investors

Depending on what your business idea is, you may be able to find people or businesses that are willing to invest in your business to help you out. This could be because your product will revolutionize how they do business or just because they believe in your and your product. Again, get a legal document written up and signed for protection.


If you have a good product, and a good plan, you should have no problem finding the funding you require to get you started. Remember that chances are things are going to cost more than you expected and likely will take longer as well.