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Running a business

How to get funding for a business: 16 vetted ways for 2025

When expanding your business, one of the biggest challenges is getting funding. From renting office space to buying goods and hiring staff, running your business requires money and investments. The QuickBooks Entrepreneurship in 2025 report revealed that the median cost to start a new business is $5,000, underscoring the financial obstacles every entrepreneur faces.

Whether you’re looking to grow or to put a new small-business idea into action, you might find funding is possible without visiting every bank around. Here are 16 ways to get funding for a business or startup:



  1. Bootstrapping
  2. Crowdfunding
  3. Angel investors
  4. Venture capitalists
  5. Grants
  6. Tax credits
  7. Loans
  8. Lines of credit
  9. Peer-to-peer lending
  10. Purchase order financing
  11. Vendor financing
  12. Friends and family
  13. Contests
  14. Product presales
  15. Incubators
  16. Corporate programs
Chart showing where to get funding for a business

1. Bootstrapping

Type of funding: Self 

Bootstrapping is one of the funding sources that many business owners choose when starting their venture. Nearly half (48%) of potential entrepreneurs would start a business if they had more savings, assets, or credit, highlighting the importance of personal financial resources in early-stage business development. 

Bootstrapping allows business owners to maintain full control and ownership of their company. 

Bootstrapping is also a way to test how successful a business idea is without relying on outside funding. Using personal funds, you can prove the concept and validate its potential for success. While bootstrapping can be an effective funding option, it can limit the scale and speed of business growth.

2. Crowdfunding

Type of funding: Self 

Crowdfunding involves raising money from a large number of individuals who contribute small amounts. They allow business owners to showcase their business ideas and goals. 

Crowdfunding platforms serve as intermediaries that connect businesses with potential backers. These platforms can provide different types of funding than other avenues and can often be faster. 

There are three main types of crowdfunding:

  • Equity crowdfunding: This allows businesses to raise capital by selling equity to investors online. SeedInvest is a platform that facilitates this type of funding.
  • Donation crowdfunding: This enables individuals or organizations to raise funds for a cause or project through voluntary contributions. GoFundMe is a popular platform for donation-based crowdfunding.
  • Rewards crowdfunding: This allows creators or businesses to offer backers a reward, such as a product or service, in exchange for their contributions. Kickstarter is a leading platform for rewards-based campaigns.

Launching a successful crowdfunding campaign involves several key steps:

  1. Create a compelling pitch: Clearly communicate the idea, its potential impact, and the planned use of funds. A well-designed campaign page with visuals and videos can further engage potential backers.
  2. Set a realistic funding goal: Align the goal with the business’s financial needs while being attainable within the specified time frame.
  3. Promote the campaign: Find and attract backers on various channels, including social media, email newsletters, and personal networks.

Note that each platform may have its own specific focus, such as creative projects, technology innovations, or social causes. 

3. Angel investors

Type of funding: Equity 

Angel investors are generally individuals (or a group) who provide financial backing and support to startups and early-stage businesses. They typically invest their own money and are often experienced entrepreneurs or business professionals. Angel investors are one of the key types of funding for startups, but they also usually take an equity stake in the company. 

Angels typically take more risks on innovative and unproven business ideas. To attract the attention of angel investors, business owners should have a pitch showcasing their unique selling points, market potential, and growth strategy.

4. Venture capitalists

Type of funding: Equity funding 

Venture capitalists also invest in companies in exchange for an equity stake. However, they tend to be firms and invest more than angel investors. They often invest in industries with high growth potential, such as technology. 

Venture investors are another type of funding for startups, where, unlike traditional funding sources, venture capitalists are willing to take risks on innovative and unproven business ventures.

When considering potential investments, venture capitalists evaluate a variety of criteria. They look for companies with a strong management team, a scalable business model, and a large addressable market. They also typically seek companies that have achieved some level of success, such as generating revenue.

Chart highlighting the differences between angel investors and venture capitalists

5. Grants

Type of funding: Government 

Government grants offer businesses nonrepayable funds for specific projects or initiatives, making them a valuable source of capital, especially for startups and small businesses. 

Eligibility for these grants often hinges on factors like industry, innovation, and the potential positive impact on the local economy or society. For example, there are specific grants for women-owned businesses

Grants are commonly awarded for activities such as:

  • Research and development (R&D): Grants supporting innovation and technological advancements
  • Market expansion: Grants designed to help businesses enter new markets or expand their reach
  • Environmental initiatives: Grants for projects that promote sustainability and environmental conservation
  • Community development: Grants for businesses that contribute to local community growth and well-being

To find relevant grant opportunities, businesses should research private foundations and federal, state, and local government programs.


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6. Tax credits

Type of funding: Government 

Government tax credits incentivize specific business activities and reduce a company's tax liability. These credits can significantly offset costs related to strategic investments and operational improvements. Key areas where tax credits are often available include:

  • Research and development (R&D): Credits for investments in innovative research and development activities
  • Energy efficiency: Credits for businesses that implement energy-saving measures or invest in renewable energy
  • Hiring and training: Credits for businesses that hire and train employees from specific demographics or invest in workforce development
  • Job creation: Credits for businesses that create new jobs in designated areas or industries

Businesses should consult with tax professionals to identify eligible tax credits and ensure compliance with relevant regulations.

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7. Loans

 Type of funding: Debt 

Small business loans are a popular funding option for businesses looking to invest in new equipment or locations. There are different types of loans with differing eligibility criteria and repayment terms. Here are the three most common types: 

  • Term loans: These are traditional loans with a fixed repayment schedule and interest rate. They are suitable for large, one-time investments like equipment or real estate purchases. To determine loan terms, lenders evaluate the business's creditworthiness, financial history, and collateral.
  • SBA loans: Backed by the Small Business Administration, these loans offer favorable terms and lower interest rates. They are designed to support small businesses and often have less stringent requirements than traditional loans.
  • Equipment loans: Specifically designed for purchasing equipment, these loans use the equipment itself as collateral. They streamline the borrowing process for businesses needing to acquire essential assets.

Online lending is also an option, offering an alternative to conventional banks. These platforms leverage technology to provide faster application and approval processes, often with varying eligibility criteria and loan terms compared to traditional banks.

8. Lines of credit

Type of funding: Debt 

A line of credit offers businesses flexible access to funds up to a predetermined limit. Unlike a traditional loan with a fixed repayment schedule, a line of credit allows businesses to draw funds as needed and repay them over time. This flexibility makes it ideal for managing cash flow fluctuations, covering unexpected expenses, or seizing time-sensitive opportunities.

The lender establishes the credit limit based on the business's credit history, financial stability, and projected cash flow. Interest is charged only on the amount of funds drawn, providing a cost-effective solution for short-term financing needs.

9. Peer-to-peer lending

Type of funding: Debt 

Peer-to-peer (P2P) lending platforms connect borrowers directly with individual investors, bypassing traditional banks. This alternative funding method offers several advantages for small businesses. P2P lending platforms often have streamlined application processes and faster approval times compared to traditional banks. 

Interest rates and loan terms vary based on the borrower's creditworthiness and the platform's policies. Common platforms include LendingClub and Prosper.

Here's how P2P lending typically works:

  • Borrowers create a loan request on the platform, providing information about their business and financial history.
  • Investors review loan requests and decide whether to fund them.
  • If the loan is fully funded, the borrower receives the funds, and repayments are made through the platform.

P2P lending can be a viable option for businesses with good credit but may find it challenging to secure traditional bank loans.


note icon Don't just focus on the lowest interest rate. P2P platforms often have varying fee structures. Compare the total cost of the loan, including origination fees, to truly understand the best deal.


10. Purchase order financing 

Type of funding: Debt 

Businesses can use their purchase orders from buyers as collateral to get funding. This type of funding benefits businesses that lack the working capital to fulfill large orders.

Here’s how purchase order financing works:

  1. A business receives a large purchase order and approaches a purchase order financing company.
  2. The financing company evaluates the buyer’s creditworthiness and the transaction’s profitability.
  3. The financing company provides the necessary funds directly to the supplier or manufacturer to fulfill the order.
  4. The buyer pays for the goods, and you get the remaining funds after paying any fees and interest to the financing company. 

Purchase order financing offers several advantages for businesses. It allows them to take advantage of large orders that would otherwise be challenging due to financial constraints.

11. Vendor financing

Type of funding: Debt 

Vendor financing allows businesses to obtain funding by leveraging supplier relationships. It’s also known as supplier financing or trade credit. This funding option is particularly relevant for businesses that need capital to purchase inventory or raw materials.

Here’s how vendor financing works:

  1. A business needs funding and negotiates with its suppliers to extend payment terms.
  2. Instead of paying upfront for their purchases, they can defer payment for a certain period, such as 30 or 60 days.
  3. This creates a cash flow buffer for the business, as they can sell the purchased goods and generate revenue before paying the supplier.
  4. The terms and conditions of vendor financing vary depending on the agreement with the supplier. Some suppliers may charge interest or fees.

Vendor financing is useful for industries where inventory or raw material purchases are significant, such as manufacturing, retail, and wholesale. For example, a clothing retailer may negotiate with their garment supplier to defer payment until selling the products to customers. This enables the retailer to stock up on inventory without depleting their working capital.

By extending payment terms, businesses can manage cash flow and secure needed inventory or materials. 

12. Friends and family

Type of funding: Self 

Seeking funding from friends and family is an effective way for many entrepreneurs to get their businesses off the ground. However, you’ll want to approach these relationships with professionalism and transparency.

When asking loved ones for funding, treat the process as a formal business transaction. Have a business plan that outlines your vision, goals, and financial projections, as well as a contract or something in writing.

Be open and honest about the potential risks and rewards of investing in your business. Clearly explain the possible outcomes, including the possibility of losing their investment. Providing this information upfront can help avoid any misunderstandings.


note icon Friends and family are more likely to offer flexible terms versus traditional lenders, but if the business fails, it could strain the relationship.


13. Contests

Type of funding: Self 

Contests and competitions allow you to showcase your ideas and potentially win financial support. Participating in business contests typically involves an application process. Some contests may require an elevator pitch or presentation, where you pitch your idea to judges or potential investors.

These contests can be a valuable way to get funding, but even if you don’t win, you can gain exposure and get networking opportunities.

14. Product presales

Type of funding: Self 

Product presales allow business owners to generate revenue upfront. Presales involve selling your product before making or producing it. 

This method, also known as advance payments, allows you to validate your idea before investing in production. It’s one of the great ways to fund a business, and it reduces the risk of financial loss.

Conducting successful presales campaigns requires careful planning and execution. Here are key strategies to consider:

  • Build anticipation: Create a buzz around your product by teasing its features and benefits. Use your email list or other marketing channels to generate excitement and attract potential customers.
  • Offer incentives: Provide early adopters with exclusive incentives, such as discounted prices, limited edition versions, or additional perks. These incentives encourage customers to commit to the presales, boosting upfront revenue.
  • Leverage social media: Utilize social media platforms to reach a wider audience and engage with potential customers. Share sneak peeks, product updates, and customer testimonials to build trust and encourage presales.
  • Communicate value: Clearly communicate your product’s value and unique selling points. Show potential customers how you can improve their lives or solve their problems with your product. 

Business owners use presales to secure funding and gain insights into the market demand. They then use that revenue to fund production and further marketing.


note icon Don't neglect post-presale communication. Maintaining transparency and keeping your early backers updated on production timelines and potential delays builds trust and reduces refund requests.


15. Incubators

Type of funding: Equity 

Incubators are programs that provide resources to help early-stage businesses get off the ground. One of the main benefits of joining an incubator is access to physical space, office equipment, and technology. It also allows businesses to focus on their core business operations.

Some top incubators include:

  • Y Combinator: A well-known startup accelerator that provides seed funding and mentorship
  • Techstars: A global network of startup accelerators offering mentorship-driven programs
  • 1871: A Chicago-based incubator focused on digital startups
  • MassChallenge: A global accelerator program that supports high-impact, early-stage entrepreneurs
  • Capital Factory: An Austin-based incubator and accelerator focused on technology

Incubators generally require you to submit an application and provide details about your business, such as a business plan. In addition to resources, incubators provide mentorship from experienced professionals. These networks can open doors to new opportunities, partnerships, and funding sources.

16. Corporate programs

Type of funding: Equity 

Large corporations utilize corporate programs to invest in businesses and bring new ideas and technologies into their business. Like incubators, they offer resources like mentorship and office space. To be eligible for funding through corporate programs, businesses usually need to meet certain criteria:

  • Industry focus
  • Stage of development
  • Revenue potential
  • Alignment with the corporation's mission or goals

In return, you may have to give the company a stake in your business or agree to certain terms, such as exclusivity or noncompete clauses.

How to prepare for raising money

Depending on the funding path you choose, there are several crucial steps to take before seeking investment.

Write your business plan

A solid business plan is essential for attracting investors. It should detail your business's vision, goals, and strategies, including comprehensive marketing and financial projections. 

Include a compelling executive summary that provides an overview of your business and a thorough competitor analysis, such as a SWOT analysis, to demonstrate your understanding of the market.

Understand your financial needs

Before asking for funding, you need a clear picture of your financial needs. Take the time to calculate your expected overhead and potential costs. The minimum amount of money you need to start your business depends on your industry, working capital, taxes, and where you operate. When building your financial projections, focus on your sales forecasts and expense budgets.

Rehearse your pitch

It’s time to prepare the pitch you’ll use to convince investors to fund your business. In general, you want your pitch to be around 45-60 seconds long—about the length of an elevator ride between floors—hence the term “elevator pitch.” 

You can always rely on friends, family, and mentors for feedback. Once you have your pitch in order, you can record yourself making the pitch. You don’t have to post it on social media, but you can use the recording to see improvement opportunities.

Tips for minimizing your startup costs

When starting a business or deciding to scale up, you can lower the amount of capital you need by minimizing your costs. Here are five practical tips and strategies to help you minimize your startup costs:

  1. Plan and budget: When launching or growing your business, create a business plan and budget. This will help you determine your funding needs and identify areas where you can reduce spending. You can use free budget templates to help you get started. 
  2. Embrace cost-saving measures: Look for innovative ways to cut costs without sacrificing quality. Consider options like purchasing used equipment versus new. 
  3. Utilize virtual office space: Instead of leasing traditional office space, consider using virtual or coworking spaces. These options often provide flexible leasing terms at a fraction of the cost. 
  4. Hire freelancers or part-time employees: Rather than immediately hiring full-time employees, consider utilizing freelancers. This can help you save on salaries, benefits, and other employee-related costs while still getting the necessary work done.
  5. Leverage technology: Take advantage of technology tools and software that can streamline your operations. This can reduce the need for manual labor, optimize processes, and save costs in the long run.

By implementing these strategies and being mindful of your expenses, you can increase your chances of long-term success. Remember that every dollar saved at the beginning can make a significant difference in your business’s growth and profitability.

Run your business with confidence

After researching these 13 methods and unique ideas on how to get funding for a business, spend time investigating the terms and conditions of each to make sure they fit your business. 

On top of that, you need to ensure your finances are stable before reaching out for funding. Online accounting software like QuickBooks ensures you can easily create financial reports to show your business is on the right path and easily manage your business finances. 


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