How to Raise Money for a Business

How to Raise Money for a Business

From Karla Lopez

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Raising money for your business is a lot like dating. You need to find the right person, but you also have to know how to make them interested in you. And just like with dating, there are many different ways that people can help fund their ventures—with varying degrees of success. 

Before we get into specific strategies for raising money from investors or banks, however, let's talk about what we mean when we talk about fundraising:


Crowdfunding is a great way to raise money for your business. You can use crowdfunding platforms like Kickstarter or Indiegogo, which are easy and free to use. 

Some crowdfunding platforms have lower fees than others, but all of them require that you agree not to sue the company if they don't deliver the product or service as promised (known as "crowdfunding fraud").

Some people think that crowdfunding is only for small projects because they're afraid of getting scammed by big companies who will take their money and run with it. 

But there are some big crowdfunded businesses out there—like Warby Parker and Zach Braff's Wish I Was Here movie—and many more in between!

Crowdfunding works best when you have something unique that people want but don't know about yet; if this describes your idea then consider doing some research into existing platforms before jumping into one yourself!

Getting Loans Online

If you want to raise money for your business, you have several options. You can apply for loans from banks and credit unions, but these are normally only available to businesses with strong credit ratings. 

You can also ask friends and family members if they'll loan you money—but this may not be a good idea if they're not familiar with the business or industry in question!

Online lenders offer another option: They provide installment loans that are easier to qualify for than traditional bank loans because there's no paper trail involved (which means less paperwork). 

And although getting loans online from lending platforms aren't regulated by federal agencies like banks are, this means there isn't any risk of failure due to fraud or bad practices. 

Instead, potential investors will evaluate each company individually before making their decision about which one might work best for them financially as well as socially.


Bootstrapping is a way to fund a business by using your own money. You don’t need investors or venture capital to get started, but this method takes longer and can be more challenging than other options.

Bootstrapping may be right for you if:

  • You have some savings available that can help pay off the initial costs of starting up your business (for example, if you already have an income).

  • You want to grow your business slowly over time and don't mind putting in extra work while doing so—in other words, bootstrapping isn't necessarily a quick fix for big problems like lack of capital or technical expertise.

Venture capitalists

Venture capitalists are professional investors who provide financing to startups and small businesses. They're also called venture capitalists or angel investors, because they're often found in their own offices (angel) or at other locations (venture capital).

Venture capital firms have a large amount of money to invest—most of them have more than $1 billion in assets under management. They look for companies that have a good chance of success, typically involving high-tech fields such as computer programming and software development. But also including other industries like healthcare and finance. 

Because this is an industry where there aren't too many established players yet, venture capitalists are willing to take risks on companies that may not be profitable yet but could become profitable later on down the road if the business plan works out well enough during its early years.*

Small Business Administration (SBA)

The Small Business Administration (SBA) offers loans to businesses that are unable to get loans from traditional lenders. These loans can be used to expand a business or make improvements to property. They're available for businesses that are unable to get financing through a bank or other lender because of their size, financial condition, or location.

The SBA has several different categories of loan programs:

  • Microloans – These funds provide low-interest financing for small businesses that need up to $50,000 in capital but don't meet all the requirements for larger SBA programs like 7(a) Guaranteed Loans and 504 Loans.* 

  • Capital Project Grants – These funds are used by states and localities as part of their efforts to increase economic development within their areas.

  • Community Development Block Grants (CDBG) – These funds help communities revitalize themselves through infrastructure improvements such as roads & bridges improvement projects; parks & recreation centers; sewer treatment plants; etc. 

  • Neighborhood Stabilization Program – This program helps neighborhoods address problems such as crime & drug abuse while providing job training opportunities

Businesses require funding, and it's important to know how to find investors who can help you get the money that you need.

You may not have the money to start a business, but that doesn't mean you can't fund it. There are several options available to you, and they all have their own pros and cons.

  • Crowdfunding: This is when people who are interested in your company pitch in money. You do this by creating a campaign on Kickstarter or Indiegogo and asking for contributions from fans who think your idea will be successful. If enough people contribute enough money, then this could be used as seed capital for your project (more on this later).

  • Loans online: You might want to get an SBA loan if you're looking for loans with low interest rates—but only if there's no other option! The reason why these loans cost so much is because they require extra paperwork from investors who want them approved quickly before receiving their funds back from companies like SBA (which means more costs). If possible though…why not try applying directly through our partner sites? They'll give better rates than traditional banks do anyway because they don't charge fees like most do.* 

  • Bootstrapping: This method involves doing everything yourself without any outside help whatsoever; however even though this can seem intimidating at first glance it really isn't so bad once learned how things work together correctly…or else risk losing everything overnight!


For most new businesses, one of the best ways to raise money is by going through a crowdfunding site. Crowdfunding allows entrepreneurs to connect with like-minded people who are interested in supporting their business idea or cause. 

After setting up a campaign on a crowdfunding site like Kickstarter or Indiegogo and creating an attractive video for your investors, you can post it online for people around the world to see! 

If by some chance you don't meet your funding goal within 24 hours of launching your campaign, then all publicity and effort will be lost with no reward for anyone involved.

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