Your first thought for small business financing might be to use your own savings or a traditional bank loan to get your business off the ground and most people would think the same but there are alternatives. There are different ways to fund your business or startup that are becoming popular but will require more work and a solid business plan. 

Personal Savings

Your first thought may be to invest your own savings into your business or you may just want to keep your rainy day fund for just that. If your startup costs are low enough and you have the available savings then this option may be the best and easiest for you. 

Friends and Family

Asking your friends and family for money is always a little tricky. Just like using your personal savings, if the loan needed is low and you feel you will be able to repay your friends and family in a timely manner, then this could be a good fit. If you do choose to go this way, it is best to have a written agreement to prevent any disagreements with friends and/or family. The signed document will keep the friend and family at ease knowing and be very detailed with agreed terms and conditions. In the agreement, for example, you could choose to have a repayment schedule or have an end date when the total loan must be repaid. All parties involved must agree on the terms of the agreement so to keep this as a business transaction.

Bank Loans

A bank loan is probably the most obvious choice for most people. There is a good reason this is a popular choice, the banks will offer you a lot of different options, like term loans and business lines of credit. There are also many different types of institutions that will offer up loans, some specialize in certain categories of businesses (i.e. agriculture, commercial properties) or some require that the company be in business for a minimum amount of months. With bank loans, the sky is the limit and with some research, you will be able to find a loan that will best suit your business needs.    


There is a multitude of grants available for all types of businesses. A quick online search will give you a long list of possibilities and with some reading, you may find one that you qualify for. If you have a  local business enterprise centre or your community futures development corporation in your area, they can help you navigate any grants that are suitable and are accepting applications. Grants can require a lot of work but are worth every hour you invest in the application process.


There are other options for you that are not most people’s first thought when it comes to loans but they are coming more popular as the years go by. I am talking about crowdfunding and angel investors.

Crowdfunding or collective financing is a way to fund a project or a business venture by raising smaller amounts of funding from a large number of people and is usually done online. Crowdfunding is especially good for a startup that will have physical products to sell. There are different websites that are very popular and will facilitate the process for you. A quick online search will lead you two of the top crowdfunding sites.

An angel investor also known as a seed investor can be a single person or a group of individuals that provide financial backing to a startup and typically in exchange for equity in the business.

Whichever option you choose and think is best for your small business, keep working hard because it’s never too late to start a great business!