12 Ways to Get Funding for a New Business

Got an idea for a new business? Learn how to determine the funding you need and discover 12 highly effective ways to get funding for your business.

Starting and growing a business is difficult without capital. But today, more so than ever, there are many ways to get funding for a new business accessible to everyone.

In this post, I’ll share 12 ways to get business funding, including a few often-overlooked methods that are more effective and easier to navigate than traditional approaches.


How to Determine How Much Funding You'll Need

Working out how much money you need to start your business is essential before seeking out funding. The first thing you need to do is create a detailed business plan. This will help you define your business strategy and push you to think through everything you need to start your business.

Part of your business plan involves looking at costs and expenses, which will differ depending on the type of business you’re starting (brick-and-mortar, online, or service provider). Even so, there are standard costs you’ll likely have no matter what. Here’s a list to get you thinking, but remember to add any other costs unique to your business not covered below.

  • Rent
  • Equipment/tools
  • Raw materials for production, supplies, inventory
  • Utilities
  • Licenses and permits
  • Insurance
  • Lawyer and accountant
  • Staff salaries
  • Advertising and marketing
  • Marketing materials, e.g., logos, business cards
  • Making a website

Once you’ve compiled your list, your next step is to get more accurate information about these costs. Conduct research, speak to people within the industry, and get multiple quotes for everything to see if you’re getting the best price.

Add up all your estimated costs and split them into initial one-time expenses (e.g., office desk, equipment) and ongoing monthly expenses (e.g., rent, payroll, insurance, utilities). Calculate ongoing expenses for the first two years of business to get a more complete financial picture.

You can use these estimations to determine how much funding you need. But always add a little wiggle room for miscellaneous and unforeseen expenses that may come up. New business owners often tend to estimate on the low side.

12 Ways to Get Funding for Your Business

Now that you know how much funding you need it’s time to go out there and get it. But how do you actually do that? What’s the best approach for you and your business? Here are 12 ways to get funding for your business and the pros and cons of each.

1. Bootstrapping

Bootstrapping refers to a self-financing method for new businesses. When you bootstrap a business, you start it with your own capital or the operating revenues of your new company. You don’t borrow money from investors and banks.


  • You own 100% of your business
  • You control the direction of your business
  • Sense of accomplishment in building your business from the ground up


  • Lack of investor support
  • Limited resources make it harder to grow
  • Challenging to manage and cover personal and business costs 

2. Friends and Family

Friends and family are often one of the first places to turn to for funding when starting a new business. You may take a few small investments from several family members or close friends willing to put money into your business. 

This type of investment often comes with no or few strings attached. But you may need to draw up an investor agreement with your family members or friends that sets out obligations like interest payments or equity stake.


  • You can maintain complete control of your business
  • Less formal and burdensome than other financing types like bank loans
  • You don't need to pay interest (in most cases)


  • Risk of losing personal relationships if the business fails
  • Misunderstandings over terms can damage relationships
  • Family or friends may demand money back when it suits them but not your business

3. Bank Loans

Business loans are one of the most common financing methods available to founders looking to start a business. But deciding whether to apply for a business loan is a significant decision that shouldn’t be taken lightly. 

If you decide to apply for a loan, talking to a real person is essential to ensure you’re filling out the necessary paperwork correctly and to increase your chances of being approved. Local banks and credit unions are typically the best bet for new businesses. Still, you’ll need to research and chat with multiple banks to find the best fit for your business needs. 


  • You keep full control of your company
  • No interference from the bank (as long as you make your repayments)
  • Competitive interest rates compared to credit cards


  • Strict eligibility criteria make it challenging to qualify for a loan
  • Lengthy application process and slow approval
  • Secured loans require collateral and carry the risk of losing your personal assets if the loan is not repaid

4. Alternative Fintech Lenders

In recent years, new alternative lenders have come onto the market offering small business loans and credit facilities via online platforms. Alternative lenders differ from banks in the underwriting and qualification process. 

While getting a bank loan requires a lengthy application process and adherence to strict eligibility requirements, alternative lenders offer a fast application process. They also have more relaxed qualification criteria around personal credit scores, annual revenue and time spent in business. 


  • Easy application process with relaxed qualification criteria
  • Rapid disbursement of funds
  • No restrictions on how you spend the funds


  • Smaller loan amounts
  • Higher interest rates compared to traditional lenders
  • Shorter loan terms

5. Crowdfunding 

Crowdfunding platforms like Kickstarter and Indiegogo have become popular ways to raise money for businesses over the last decade. These sites typically allow anyone to donate money to support a specific product or project. Investors donate money or get equity in a business depending on the crowdfunding site. 

While crowdfunding can be a great way to raise funds, it can also be time-consuming and may require posting videos or photos of the project on the site. Additionally, some crowdfunding sites only release the funds raised once the project meets its fundraising goal and may charge a percentage of earnings as a fee.


  • Investors can become valuable future customers of your business.
  • It can help validate your product or service.
  • Crowdfunding campaigns have the potential to draw a lot of public attention, helping to attract more investors and customers. 


  • Gaining trust and building interest can be a challenge
  • Not all crowdfunding sites are equal. Choosing the platform with the right terms, conditions, and fees can take time and effort. 
  • Setting realistic expectations and deadlines for launch/product releases
  • Managing compliance and accounting issues

6. Angel Investors

Angel investors fund new businesses and entrepreneurs in exchange for an equity stake. They use their personal finances and business experience to invest in the growth of companies that are just starting up or at an early stage. 

With angel investors, funding generally ranges from 25 to 100k and can be a one-off injection to cover startup costs or ongoing support.


  • Less formal and more flexible than other types of startup funding
  • Investment does not have to be repaid in the event of business failure.
  • Investment often comes with guidance, support and connections.
  • Monthly repayments are not required


  • It can be challenging to find and convince an angel investor to invest 
  • Requires giving up company equity
  • Shared control over business decisions & roles may be unclear and lead to disagreements

7. Venture Capital

Venture capital firms (VCs) pool money from groups of wealthy investors, investment banks and other financial institutions and invest in different types of businesses in return for an equity stake. 

VCs generally look for a strong leadership team, a large potential market and a strong competitive advantage. They also tend to specialize in investing in specific industries where they have expertise.


  • Potential to raise large amounts of capital 
  • Technical and managerial expertise is often provided
  • Help to raise future rounds of funding is available.
  • Investment from a well-known VC can give credibility and attract publicity


  • VC funding is relatively scarce and difficult to get
  • Requires giving up company equity and sharing control over business decisions
  • Some VCs require a formal reporting structure and board of directors which can be a big ask for a small business

8. Small Business Grants

Small business grants are offered by governments, private companies and non-profit organizations. They’re designed to help small businesses develop and grow and usually don’t require repayment, which is why many people consider them free money! 


  • Relatively easy to find online
  • Don’t need to be repaid
  • Helps create credibility and attract future investment


  • Takes time and effort to research and apply for funding
  • Competition for grants is usually very high
  • Strict conditions and spending restrictions on funding often apply

9. Startup Competitions

Startup competitions are contests where entrepreneurs pitch their startup idea to investors and compete for cash or equity-based prizes. These competitions are typically held in big cities with many technology-based startups and focus on specific themes. 

For example, TechCrunch Disrupt is a well-known startup competition in San Francisco focusing on consumer tech startups. That said, local competitions in smaller cities that welcome businesses of all types also exist.


  • Gain exposure to investors and a wider network of industry professionals 
  • Prize money doesn't require repayment


  • Highly competitive - especially the more well-known competitions
  • Requires public speaking and communication skills

10. Accelerators and incubators

Accelerators and incubators assist entrepreneurs in their journey to become successful businesses. But there are significant differences between the two. 

Accelerator programs work with startups for a short period of time and invest a small amount of capital in return for a minor equity stake. Incubators work with startups for longer, providing guidance, assistance and mentorship. They offer little to no upfront capital and don’t take a stake in your business. 


  • Mentorship and guidance help you avoid mistakes early on
  • Helps build valuable connections and networks
  • Provides access to capital upfront or potential investment opportunities in the future
  • Acceptance to a prestigious accelerator provides validation for investors in the future


  • Extremely competitive and challenging to get
  • Your schedule revolves around your mentors for several months
  • Some accelerators and incubators offer limited value

11. Product Pre-Sales

Pre-selling is a strategy where you sell goods or services before those products exist - think of it as an early adopter sale! This can work well with some projects because if people like what’s being offered there will already likely be a demand by virtue of them being ahead in line when it comes time to buy. 

Despite many larger companies offering pre-sales and crowdfunding platforms like Kickstarter popularizing this funding strategy, pre-selling remains an often-overlooked way of financing early-stage business operations.


  • Helps validate if a product or service is worth selling
  • You keep 100% of your business equity
  • Pre-sales can help garner hype and excitement around your business 


  • Requires initial funds for setting up website, marketing and promotion
  • Pressure to deliver products or services within certain time frame

12. Credit Cards

Credit cards are great for getting fast money and can be a highly effective way of funding your business if used responsibly. If your business doesn’t have many expenses, you can use a credit card to cover any initial startup costs and make minimum repayments until your business gets off the ground!


  • You keep 100% of your business equity 
  • Avoid providing collateral as required by many types of bank loans
  • Relatively easy to apply and qualify for a credit card


  • Merged business and personal expenses make tracking funds a challenge
  • Interest rates can build up quickly and become hard to repay. 
  • Carrying card debt can hurt credit score and make it harder to obtain future loans 

How Can You Make Your Business Seem Attractive to Investors?

Getting money from investors is a lot about how you present and promote your company, so here are some tips to help you attract investors.

Demonstrate initiative: Never go to an investor with only an idea even if you haven’t launched yet. Illustrate your initiative by showing investors how you have spoken to potential customers or tested your idea. The more proof of concept you have, the greater your chances of investment.

Know the problem: Understand the problem your product or service is solving better than anyone else. Doing so will show investors you have a deep insight into the mind of your target market.

Know your competition: You should know who your main competitors are, understand their strategies, and make sure yours are better or different.

Know your numbers: If you present to investors and have your numbers right, your credibility will go out the window immediately. Critical numbers you must know include revenue growth rate, projected revenue, target market size, cost of sales, customer acquisition cost, lifetime value, gross margin, net margin, and use of proceeds like marketing spend, among others.

Have a great team: For any early-stage business, an investor invests primarily in you and your team. If you don’t have enough experience, invite a Co-Founder on board that complements your skills and background with anything you might be missing. 

It’s also a good idea to surround yourself with mentors and advisors to demonstrate you have a team around you that’s capable of helping you grow your business and navigate any challenges. 

The Best Way for Your Business to Accept Payments

Providing your customers with convenient ways to pay is essential to your business’s success and should be a top priority. Pay.com is a payment service provider that enables you to quickly and easily accept payments in various ways. It’s perfect for businesses of all shapes and sizes and is designed to scale with your business as it grows.  

With Pay.com, you can accept credit cards, debit cards, and a wide variety of other payment methods through a customized checkout page on your website. You can customize your checkout using brand colors and logos that match the rest of your website. You can also select which payment options you want to accept to ensure customers can pay with their favorite methods.

Beyond enabling payments through your website, Pay.com allows you to create Pay Links and send them to customers via email or SMS. When customers click the link, they get directed to a customized checkout page where they can make a payment. 

Pay.com also enables you to collect customer credit card details over the phone and securely process the payment through the Pay.com dashboard. 

Getting up and running with Pay.com is also super simple and fast. You can start accepting payments in a few minutes and manage customer payments on a user-friendly dashboard. Click here to create your account now!

The Bottom Line

Many people come up with fantastic business ideas yet fail to realize their vision due to a lack of funds. But it doesn't have to be this way because there are now more ways than ever to get funding for your business. 

By taking the time to determine how much money you need and familiarizing yourself with the various funding options, you’ll be in a much better position to secure funding for your business. All you need to do is pick the best one for your business and make your move!

And don’t forget - payments play a vital role in every successful business. With Pay.com, you can enjoy a quick and easy onboarding and setup process and start accepting payments as soon as you're up and running. Click here to get started now!


How can a new business accept credit cards?

New businesses can accept credit card payments through a variety of ways with Pay.com. You can easily accept credit cards through your website, or create Pay Links and send them to customers via email or SMS. When customers click the link, they get sent to a checkout page where they can make a payment. 

With Pay.com, businesses can also collect customer card details over the phone and enter them into the Virtual Terminal to receive a payment. 

Click here to get started with Pay.com now!

What’s the best way for a small business to get funding?

The best funding option depends on a business’s unique needs and limitations. Factors such as why you need the capital, how much you need, how fast you need it, and your business’s qualifications will determine which type of funding is best. That said, the most common funding options for small businesses include bank loans, alternative lenders, and small business grants.

Can I get money to start a business without a loan?

Absolutely! There are numerous options to get money to start a business without a loan. These include using personal finances, asking family and friends, crowdfunding, angel investors, venture capital, small business grants, startup pitch competitions and much more.

How can I start a business with no money?

Starting a new venture without money is more than possible if you’re willing to get creative and work hard. Start by assessing your skills and finding your niche. After, draw up a business plan, establish an online presence, find a way to accept payments and spread the word to as many people as possible!

How can I find investors for my startup?

The best way to find investors is through an introduction from a mutual connection. If this isn’t an option, you can use online platforms like Angelist or find local groups of angel investors by simply searching online. You can also go to local startup events and meetups or search on social media platforms like LinkedIn and Twitter, which investors are known to spend time on.

Meet the author
Anthony Back
Anthony is an experienced fintech analyst, content marketer, and copywriter based in Tel Aviv, Israel. With a deep understanding of payment technologies, he has worked with leading financial institutions and fintech companies worldwide.
The Simple Way for Your New Business to Accept Payments

With Pay.com, you can offer your customers multiple payment options. You can easily accept credit and debit cards, digital wallets, ACH transfers, and many more. Setup is easy – no technical background required!

Get started now

Ready to boost revenue for your business

Contact sales