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As we see many of us get feared due to insufficient funds in our hands for business purposes as a result we take gear in the back direction before researching much more on sources of funding for businesses and startups.

Now the first question that arises is How To Finance A Startup Business? And you kick start your hunting that can get in investment to carry out the process.


You should keep in mind that when would you require a Source of funding depends largely on the nature and type of the business. But once you have realized the need for fundraising, you will be able to select the best business funding options from the list below.

Before you approach investors to help you fund your business or idea. You must prepare your pitch. The essential components of the pitch include a complete business plan with the projection of five years along with the investment offering an estimated valuation.

Although it’s tough to believe, locating investors is not that difficult part then of getting funded.

However when you hold a viable business plan and know how much funding you need then it is high time to start looking for investors & the best financing options for a business.

So we’ve got you to know the 10 sources of funding for startups by which you can raise the money you need to expand your business.

But before that, some of the Pro Tips, you must consider before you approach any business investors or apply anywhere.

Need Investment For Your Business : Here’s A Problem

sources of funding for businesses

I do not have an idea that who is reading this post. You might be a college student, a woman working from home, or merely a person with a small or a big business idea, if you are starting a business then I’m sure you are most worried about funding and investments for your new business or scaling your business.

I’m sure you know this, that everybody can’t able to collect funds and investment for the business. And many peoples dropped the idea when they failed or lose the hope to get an investment.

But some entrepreneurship-minded peoples are really stubborn and they don’t drop their idea, even they won’t able to manage to get investment or fund, or others if believe in their business idea or not. They just find one or another way to execute their idea.

Here a thing,

If you can’t move from 0 To 1.

How are you gonna expect someone or investors to believe you, that you can move from 1 to 10?

So, focus and find an alternate way to get started and try to take a step from 0 to 1, and then you can seek funds and investment to move further. In this way, it will be easy for you to collect investment for your business.

But I Have An Awesome Business Ideas Or Startup Ideas

sources of funding for businesses
sources of funding for businesses

Before I can share those sources of funding for businesses and startups. I want you to acknowledge something. And these things will really help you in making the right decision.

I truly understand, that you might have really awesome business or startup ideas or simply app ideas that can solve problems and you need investment to turn a hypothetical idea into reality.

But, here’s a thing,

No buddy…Gonna care how much of the great and awesome idea you have. Believe it or not, you’ll be rejected almost every time.

Because investors always believe that ‘Idea Is the Only Delusion Without Execution‘. So, if you are planning to reach out with only ideas, then this may not work out. So, you gonna have to try something different. Something alternate way.

Let’s dive into 10 Funding Sources For Businesses & Startups :

Accelerator & Incubator Program : Sources Of Corporate Finance

sources of funding for businesses
sources of funding for businesses

Accelerators & Incubators provide an excellent way to develop your baby business from scratch. These investors play a key role to turn your startups idea into a reality by providing sources of funding for businesses and Startups to make it happen.

There is a core difference between accelerator and incubator. Accelerators basically nurture businesses while accelerators fast-track businesses.

sources of funding for businesses
Difference Between Accelerator & Incubator

In the initial phase, you may have to do a little research on the ones that are closest to your resident area for getting seed funding for your startups.

Some of the benefits of getting enrolled in accelerator programs will be access to real office space for working.

This method works even better for the system where they get to engage with other company founders and also receive mentorship and guidance from top-level industry investors. 

Getting into some incubators such as Y-Combinator and TechStars can be really tough but the rewards are beyond imagining another.

But the point to note is that some accelerators are industry-specific while others can work with any kind of business. startups 500 startups, seed camp and catalyze are a few other proven accelerators.

Some Of The Top Accelerators & Incubators You Need To Know Are:

In India, Popular Sources Of Funding For Businesses Are Listed Below:


  • Introduces the team to mentors and skilled professionals
  • Building connection with other startups
  • Provides a wide network of investors
  • Accelerator assist you in benchmark your company against other startups


  • Sometimes time-consuming on lectures, events, and unnecessary meetings
  • You may have to give equity when the company grows
  • Sometimes Accelerators & Incubator had pretty weak relationships with investors
  • May lead to interference in the management decision

Angel Platforms : Sources Of Finance For Entrepreneurs

sources of funding for businesses
How Angel Investor Process?

Generally, Angel investors are wealthy people who work as a group of several individual investors.

These are some of the different sources of finance that work side by side with the investment firms who are looking to invest in various startup businesses & provide a large pool of funds for your startup.

You can get Angel investors who will not only invest in your start-up business but also provides you a mentor to assist you out.

They provide you the best solid advice and provides access to their network of contacts and a lot more in your business.

To get several investors as per your business needs, angel networks are much better especially when you are at the initial stage of the startup business.

As it works to the debt you’ll need to apply to one of those angel networks facing your location.

Once you’re able to prove to them that you have good knowledge about the business, you want to venture it and your expected returns on their investment then the angel investors will be comfortable enough & then you’ll be able to get access to the group and get investment funds for your startup.

You can raise funds from several investors that also at a much-reduced miss rate. 

Places where you can even start by funded.com angel investment network and angel capital association.

The key point to note is that to help you out an angel capital association even provides you a directory list according to the area & platform type through which you could find regional angel investors near you.

List of Leading Angel Platforms:


  • Angel investors provide mentorship along with the capital for startups
  • No need for collateral security – i.e personal assets
  • No repayment of interest
  • Access to investor’s contact directory


  • Angel investors provide lower investment capital for startups
  • Funding can be slow
  • Availability is based on who you know
  • Investor’s support and guidance may be limited

Bank Loans : Sources Of Funding For Startups

sources of funding for businesses

Normally, banks are the first source of funding for businesses when any entrepreneur thinks of getting a loan.

The Bank Provides Two Sources Of Funding For Businesses:

Sources Of Working Capital Finance 

– A Working Capital loan is the raising funds for business required to finance a company’s everyday operations & covers only short-term operational needs.

As a result, the limit is usually decided by hypothecating stocks and debtors.

A most important point to note is that these loans are not taken to buy long-term assets for investment.

In the US, you can start with sites like Kabbage can help you arrange working capital loans online in minutes. Unlike traditional lenders, Kabbage approves small business loans by studying real-life data, not merely a credit score.

For the long-term funding

Funding from the bank would involve the normal process of sharing the business strategy and the valuation details, along with the project report, based on which the loan is sanctioned.

 SME Finance Forum is a good choice as it is a platform to finance small and medium businesses. It provides startup funding options that operate almost in every country of the world.

Getting the loan is as easy as at the same time a little difficult too. 

For example– You should have a stable credit score. If you have debts or another loan pending it would be challenging to get further money from the bank. Normally, bank loans have legal regulations and these are additional requirements you need to follow to get the various sources of funding for businesses.

General Requirements For Bank Loans Are:

  • The genuine Credit score of the owners.
  • Many banks expect that the business shouldn’t be new, at least has 1 or 2 years of foundation.
  • Many banks also require that you should have an account with them.
  • Conditions may apply that the account should be for more than 1 year.
  • Leasing agreements
  • Ongoing contracts


  • Low-interest rates
  • Fast capital funding could speed up the process of income generation
  • No managerial interference
  • Interest payments on your business loan can be deductible from your taxes


  • Bank loan could be hard to qualify
  • High risk of collateral loss i.e- personal asset is at stake
  • Hard to get large amounts of funds for startups

CrowdFunding As A Sources Of Funding For Businesses :

sources of funding for businesses
Image Credit : thebalance.com

An interesting fact about crowdfunding is that it opens the investment opportunity almost for everyone.

It’s like a loan taken as a contribution or investment from more than one person at the same time.

You should also keep in mind that crowdfunding is a competitive place to obtain funding.

So unless your own business has something that could grab the attention of the average consumers through just a description and some pictures online.

You may not be able to find crowdfunding to work on.

But the question arises,

Why You Should Consider Crowdfunding As A Means Of Funding Sources?

Because the best idea behind crowdfunding is that it can generate interest and hence helps in marketing the product besides financing. It also works as a boon for your business if you are not certain of the idea of the demand of the population for the product you are working on.

As a result, you can pitch your business plan, product, or idea & let the people assist you around the world through donating money. 

Before proceeding with this startup funding option you need to study each website and its criteria carefully to discover which one aligns with your aims.

Some of the top sites for crowdfunding in India are Catapooolt., Indiegogo, Wishberry, etc these are known contributors who do not avail any profit from your company after investing in it.

Some of the US-based popular crowdfunding sites are KickstarterGoFundMeDreamFundedRocketHub, LendingClub


  • The campaign could go viral
  • Less financial risk
  • No risk of losing control over business
  • Help to build your own community


  • It takes time & money
  • The campaign may not succeed
  • Chances of stealing your Ideas
  • It may not work for all types of businesses

Government Sources Of Business Finance : Another Financing Options For Businesses

Source of funding
Source of funding

Depending on the nation you are in, it is possible to get financed from the government in a kind of microcredit or a grant.

This would happen if your business approach contributes to the growth of that nation or develop a particular industry or area.

Some Of The Top Sites For US Agencies For International Development Are Listed Below : 

Grants.gov :

It is the official access point for grants administered by government agencies.

This government site offers the most thorough database of funds the government is working to give away.

They render thousands of grants to apply for, with opportunities for companies from all backgrounds.

To view the full eligibility for each grant and apply through Grants.gov.

Challenge.gov :

It is a panel of creative, scientific, and technical competitions and grants run by agencies across the federal government to encourage innovation.

You can explore through open competitions on their homepage to see the type of challenge, prize amount, and host agency.

If something grabs your attention, designate for an account to participate and submit your entry.

GrantWatch :

This is a site to explore funding through federal, state, local, foundation, and corporation grants in the U.S. and Canada.

Most importantly, before perceiving the full eligibility for a grant, you’ll have to pay to become a member.

The Top Site For Indian Government Grants:


Startup India is a flagship initiative of the Government of India by the Hon’ble Prime Minister, to contribute to his vision of transforming India into a country of job creators instead of job seekers. 

So you can explore grants & can get access to it.


  • Free money by the government
  • You don’t have to pay anything back like the bank loans


  • Difficult to get government sources of funding for businesses
  • Uncertain future as it could get vanish with little notice
  • Strict criteria of getting loans
  • Lack of incentives

Bootstrapping Your Business : Another Great Financing Option For Businesses & Startups

sources of funding for businesses
Bootstrap Method To Finance A Business or Startups

Self-funding, also known to be bootstrapping, is an adequate source of capital for business, especially when you are just commencing your business. 

Self-funding or bootstrapping should be regarded as a first funding sources because of its advantages.

Raising funds from your saving or get your family and friends to contribute can also generate investments to get your business kick-started. 

At a later stage, investors rate this as a good point as this is suitable only if the initial requirement is small.

NOTE- Some businesses require financing options right from the day-1 and for such businesses, bootstrapping may not be a suitable alternative source of finance.


  • Fund your business with Full ownership
  • Flexible Interest Rates
  • Limited Debt
  • Control over companies direction


  • Doesn’t works for large business
  • Only works small-scale enterprise

Fund Your Business From Personal Marketing Efforts :

sources of finance for entrepreneurs
Self-Investment Through Marketing Efforts

You should not only rely on finding investors for startup .

But also make some personal marketing efforts and help them to discover you on some of the internet platforms for various sources of funding for businesses.

So it is a kind of situation where you have to put yourself at the place where investors are bound to find you.

It includes a social networking site like the website quora discussions, blog posts, and other media outlets.


  • You earn the trust of investors
  • Build reputation & trust among investors
  • Learning the market place


  • High level of competition
  • Most of the time you face ignorance by the investors

Venture Capital As A Sources Of Funding For Businesses:

If you have some new business than venture capital is one of the unique source of capital for business startups.

But before I tell you anything about venture capital startup funding options, I want you to watch this video below. You’ll eventually get to know what I’m talking about.

That’s the reason entrepreneur seeking to raise funds often turns their way towards venture capital firms. Generally, these firms provide capital and strategic assistance & much more.

It is important to note that Venture capital is not that easy. As venture capitalists typically crave to invest in startups that are pursuing big/unique ideas with high growth potential and have a working product prototype.

For example; it commonly focuses to invest in a portfolio of technologies, software, biotech, etc.

VCs generally have low investment nearly 1 to 5 million $ with the probability of high risk.

The best way to get the attention of the VCs is that a startup must have a good “elevator pitch” and an influential investor pitch deck (The pitch deck typically consists of 10-20 slides in a PowerPoint presentation to showcase the companies ideas) to attract the interest of a Venture capitalist.

Before you proceed for this source of capital for business, must note down all the pros & cons of VCs .


  • No obligation to repay VC funds
  • Venture capital assist your company to grow fast
  • VCs can connect you to other business leaders who can help you in your business


  • Funding depends on big/unique ideas
  • Difficulty in getting funds for business investment
  • Your investors own control in your company
  • Interference in the managerial decisions

Network Connection For Various Sources Of Finance:


So as you all know social media has always been a great platform to grow your business to a tremendous height.

Similar to that some social media platforms provide investing and funding opportunities like the famous network builder  LinkedIn that is a spot to mark for investors.

As you can connect with business personal and mentors who are welcoming to invest and assist people over there.

This is a time taking process as you need to have a long list of links to attract people to your ID.

However, it is one of the simplest means to find investors online.

You can get an Email ID using Linkedln and BlueTie and then have your way to a meeting.

The online lending platforms evolved with new solutions as this works peer-to-peer platform and a non-traditional lending source for investing in small businesses.

One of the secure online lending platforms are trusted Leaf Lending Club & Prosper etc.


  • Connect with businessperson & mentors
  • Build trust among the investors


  • High level of competition
  • Chances of stealing ideas on some of the platforms

Fundraising Advisors: For Various Sources Of Finance

financing options for business
Read More About Fundraising

 If none of the above types of funding for businesses worked or you are not positive enough to crack the deal.

Then you can hire a fundraising advisor for the best Source of funding who will meet potential investors in your presence and close the deal on your behalf. 

However, there are several fraud advisors in the market who try to provide the different types of funding for businesses.

So, you need to be cautious before you hire someone and reveal your startup idea to them.


  • Helps to crack the deal with the investors
  • Access to expert advice for different Sources of funding


  • Some of the advisors are fraud
  • Revealing ideas may result in stealing your ideas
  • Rejection by some of the investors

Pro Tips : Before You Reach Out To Business Investors

  • Research about your investor
  • Prepare to contact several investors
  • Practice your pitches with “junk” investors
  • Narrate your story
  • Competition/Industry updates
  • Market size
  • Prepare your financial model
  • Prepare your team chart

Watch this video for reference, If you want to learn & prepare a perfect pitch deck for investors.

Credit : Video By Slidebean

Unique Ways For Small Business Funding Sources

Participate In Business Plan Contests:

There are some organizations out there that offer monetary rewards or even financing for anyone who wants to raise funds for their startups.

Maybe they have some eligibility requirements, judging criteria, or some entry fees. But if you have a strong pitch, this might be one of the sources of funding for your startups.

Some Frequently Asked Question

When Should You Raise A Money For Startups?

The most suitable time to raise funds for a startup is when you have a clear view of future goals along with how much funds are needed for your startup and a much clear idea of what you are going to do with all those funds which will set higher importance for your business.

Where Does Sources Of Corporate Finance For Startups Come From?

According to data collected by Fundable, only 0.91 percent of startups are financed by angel platforms, while a measly 0.05 percent are financed by VCs. In contrast, 57 percent of startups are funded by personal loans and credit, while 38 percent support funding from family, friends & peer groups.

What Do Startups Use Funding For?

Startups raise funds for several purposes but most frequently the main purpose is to grow their business.

What Is The First Step For Small Business Funding Sources?

The first step to raising Small business funding sources is to decide how much funds you need. Create a budget that includes first-year start-up and operating costs, or one that covers your expansion costs, which will help you decide how much of your operations you can fund with revenues, and how much you’ll need to borrow.

What Is The Correct Sequence Of Startup Fundraising Stages?

The raising of sources of funding for businesses involves multiple rounds of Funding or a series that is obeyed. This includes Series A, B, C, and D. In each round the startup raises a higher value and enhances their valuation as well.

Final Thoughts

sources of funding for businesses
Final Thoughts

There are several techniques to find investors for your business and startups.

Not all ways will work for you, you may face rejection too. But you need to learn from those rejections and improve yourself and your idea to connect efficiently with investors.

Remember, I told you in the beginning. Find an alternate way…Consider initiating your hypothetical idea into reality.

Start right from the scratch, build something tangible or prototype that describes your ideas and what kind of problem you want to solve, and how.

Shortly, you will find the one that will assist you with the best Source of funding to take your startups to the next level.

Note :

Are planning to start a business or have already a business setup. Then here is one of my best recommendations.

The USA is allowing non-residents to get US-registered business as well bank account, and US phone number. If your business is already set up and has registered, still you can register your business with the United States.

The benefit is amazing, you can find a lot of customers, clients, and new projects. When you have a US-registered business.

And you can do this right from your home or office.

If you found this post helpful and beneficial consider sharing it on your social network and through email. That really motivates me a lot to bring more content like that.

If you’ve any queries or anything to share, don’t hesitate to comment down below. I’ll be back to discuss with you ASAP when you comment.


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