How to Fund a Startup Business No Matter What

What do you need to know about how to fund a startup business? First, there is more than one way to do it!  It’s true. Regardless of what is happening around you, in most cases you can fund a startup business in some way.  It may very well take longer depending on your exact situation, but it is almost always possible. 

You Can Fund a Startup Business No Matter What is Going On

The thing is, virtually everyone assumes if they cannot get a business loan, they can’t fund a startup business.  That really isn’t true. There are all kinds of options for funding. Loans are only one of them. Furthermore, there are probably many more types of loans than you think. We put together a list of some of the most common, and less common, ways to fund a startup business in any situation. 

Fund a Startup Business: Traditional Loans

These are the loans that you go to the bank to get.  With a traditional loan, you are almost always going to have to give a personal guarantee.  This means they will check your personal credit.  If it’s not great, you are probably out of luck. That is where a lot of people stop, thinking they have hit a brick wall.

There are ways over that wall however.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Fund a Startup Business: SBA Loans

SBA loans are traditional bank loans.  However, they have a guarantee from the federal government. The Small Business Administration works with lenders to offer small businesses funding solutions that they may not be able to get based on their own credit history. Because of the government guarantee, lenders are able to be a little less strict on personal credit score requirements. 

The trade-off is that the application progress is lengthy. There is a ton of paperwork connected with SBA loans. 

Fund a Startup Business: Private Loans

Private business loans come from companies other than banks.  These companies are sometimes called alternative lenders.  Many have popped up in the past decade as entrepreneurship has become more common.  The need for a financing option from somewhere other than traditional banks has spurred this growth. 

There are a few benefits to using private business loans over traditional loans.  The first is that they often have more flexible credit score minimums.  They still rely on your personal credit. Yet, they will often accept a score much lower than what traditional lenders require. Another benefit is that they will sometimes report to the business credit reporting agencies.  That helps build or improve business credit. 

The tradeoff is that private business loans typically have higher interest rates and less favorable terms.  Still, the ability to get funding and the potential increase in business credit score can make it well worth the cost. 

Examples of Private Lenders

The thing about private lenders is, you almost always have a time in business requirement. However, it can be as low as one year, even 6 months in some cases.  


The minimum loan amount available from BlueVine is $5,000 and the maximum is $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Personal credit score has to be at least 600. It is also important to know that BlueVine does not offer a line of credit in all states. 


With OnDeck, applying for financing is quick and easy. Apply online, and you will receive your decision once application processing is complete. Loan funds will go directly to your bank account. The minimum loan amount is $5,000 and the maximum is $500,000.

There is a personal credit score requirement of 600 or more.  Also, you must be in business for at least one year. There is an annual revenue requirement of at least $100,000 as well. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements. 

Fund a Startup Business: Crowdfunding

Crowdfunding sites allow you to pitch your business to thousands of micro investors. Anyone who wants a piece of the action can buy in. 

Investors pledge amounts ranging from as low as $5 to as high as they want. They may give $5, $80, $150, or even over $500. As a general rule, they can give as much or as little as they want.

Though not always necessary, most business owners offer rewards for investment. Typically, this comes in the form of the product the business will be selling. Different levels of giving result in different rewards. For example, a $50 gift may get you product A, while a $100 gift will get you an upgraded version of product A.

The two most common crowdfunding platforms are Indiegogo and Kickstarter. 

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Fund a Startup Business: Angel Investors

These investors are usually only in for a one-time deal. Many choose to spread their risk out over many people and many businesses to be certain they get a safe return on their investment.

Angels tend to be a lot more informal than most types of funding. They can be people you know. Or they can be people you connect with through networking or other means. 

Angels are not covered by the Securities Exchange Commission’s (SEC) standards for accredited investors. But a lot of them are accredited investors anyway. 

To become an accredited investor, an person has to have a minimal net worth of $1 million, and an annual income of $200,000.

There are a number of angels who aren’t millionaires. They could be friends or colleagues with home equity, or local professionals who are looking to invest. 

How Do You Find Angel Investors?

The best way to find these kinds of investors is to ask. You can also try an angel investors website or network. Try Gust, which used to be called Angel Soft. They keep a database of investors, companies, and programs. Startups can also search for business plan competitions and more.

Another option is to look at the biggest angel investor groups. Be aware, however, that these meetings are really only going to happen if you can get an introduction. 

According to Entrepreneur, in order from smallest to largest the top 10 Angel Investor groups are:

  1. New York Angels Inc.
  2. Alliance of Angels (Seattle)
  3. Pasadena Angels
  4. Hyde Park Angel Network (Chicago)
  5. Band of Angels (Menlo Park, CA)
  6. North Coast Angel Fund (Cleveland)
  7. Golden Seeds LLC (NYC)
  8. Investors’ Circle (San Francisco)
  9. Tech Coast Angels (Los Angeles) and
  10. Ohio Tech Angel Funds (Columbus, OH)

Focus and requirements may vary from group to group.  For example, some concentrate on local startups only. Do your research so you don’t waste yours and the angels’ time if it isn’t a good fit.

Fund a Startup Business While Keeping Your Day Job

Here’s an option that most don’t want to hear, but it is totally legitimate and sometimes, it’s just the best way.  If you do not have access to a ton of funds to launch a huge new business right away, consider keeping your day job and start your business small, as a side hustle. 

Not every business can start this way, but a lot can.  For example, a bakery or a cleaning business can easily start this way.  If you set up from the beginning to be fundable and build business credit, you can go even further.  More on that later. 

Fund a Startup Business: The Retirement Years

This is similar to keeping your day job in that you start small.  If you have retirement savings you could use that as loan security, or take a loan directly from retirement if your plan allows for that.  You can build your business slowly, a little at the time. While you’re doing so, you can work to build business credit and overall fundability 

Whatever You Do, Build Fundability from the Beginning

So, how do you do that?  How do you build fundability and business credit? The first thing you do is set up your business to be fundable.  When you do this, you will also be setting it up to be a separate entity from you as the owner, which is the first step in building separate business credit.  How do you build a fundable foundation? You need the following.

Contact Information Separate from the Owner

The first step in setting up a foundation of fundability is to ensure your business has its own phone number, fax number, and address.   That doesn’t mean you have to get a separate phone line, or even a separate location.  You can still run your business from your home or on your computer if that is what you want.  You don’t even have to have a fax machine.  


The next thing you need to do is get an EIN for your business.  This is an identifying number for your business that works in a way similar to how your SSN works for you personally.  


You have to incorporate as an LLC, S-corp, or corporation. It gives credit to your business as one that is legitimate, and it separates your business from you as the owner.

Which option you choose does not matter as much for fundability as it does for your specific budget and liability protection need.  The best thing to do is discuss it with your attorney or a tax professional.  You are going to lose the time in business that you have.  When you incorporate, you become a new entity. Basically, you have to start over. You’ll also lose any positive payment history you may have.

This is why you have to incorporate as soon as possible.  Not only is it vital to fundability and for building business credit, but time in business is also important.  The longer you have been in business the more fundable you appear to be.  That starts on the date of incorporation, regardless of when you actually started doing business. 

Separate Business Bank Account

You have to open a separate, dedicated business bank account.  There are a few reasons for this.  First, it will help you keep track of business finances.  It will also help you keep them separate from personal finances for tax purposes. 

In addition, you cannot get a merchant account without a business account at a bank. That means, you cannot take credit card payments.  Studies show consumers tend to spend more when they can pay by credit card.


For a business to be legitimate it has to have all of the necessary licenses it needs to run.  If it doesn’t, red flags are going to fly up all over the place.  Do the research you need to do to ensure you have all of the licenses necessary to legitimately run your business at the federal, state, and local levels. 


These days, you do not exist if you do not have a website.  However, a poorly put together website can be even worse.  It’s the first impression you make on most, and if it appears to be unprofessional it will not bode well for you with lenders or customers. 

Fund a Startup: Build Business Credit 

Okay so, you need to know how to fund a startup, not how to set it up, right?  Here’s the thing. Once you have your business set up like this, you can start building business credit so that you have more options for funding your business.  

The main key to this is to use starter vendors that will issue net terms on your invoices and report those payments to the business credit reporting agencies.  Even if you are keeping your day job or starting small during retirement, you can use these vendors for the things you need in the everyday course of business. 

Things like office supplies, packaging, and even cleaning supplies can be purchased from such vendors on account using your business information.  As you get enough of these accounts reporting, you can apply for store credit, then fleet credit, and eventually, regular business credit cards that are not limited to specific types of purchases or specific stores.  Then, your business credit should be strong enough that you can qualify for a loan and launch your business on a bigger scale.

Check out our best webinar with its trustworthy list of seven vendors to help you build business credit.

Fund a Startup Business: There are More Ways than One

The truth is, there is more than one way to fund a startup business.  Depending on your specific situation, you will have to decide which option or combination of options will work best for you and your business.

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