The 5 Best Ways to Raise Small Business Funding

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‍Financing your small business can feel like an endless loop of rejection. You keep hitting walls, and your bank just keeps telling you to lower your expectations.

But the truth is, financing your business isn’t as difficult as you might think. Even if you don’t have a lot of capital to work with, there are plenty of ways to get the money you need to grow your business.

Here are the five best ways to raise small business funding.

#1. Sell Your Investable Product

Most new businesses begin with an idea for a product or service. But to turn that idea into revenue, you first need to build a product that people want to buy. I

f you can find a way to use your business as a vehicle for promoting your own product line, that could be an option for raising funding.

While this method is usually more successful in the consumer-goods sector than in the services sector, it can be a viable option for entrepreneurs in any industry.

Your product is the lynchpin of your business. It’s what you sell. It’s what allows you to provide customers with the services and products they need.

And it’s what you’re hoping to market to potential investors and lenders. To find investors, you can go to business networking events, pitch competitions, or contact your local Angel group.

To find lenders, you might try contacting your bank, credit unions, or other financial institutions.

#2. Find Investors

Investing in a business is one of the best ways to raise business funding. Because a business loan is an asset-based loan, it’s usually a much faster way to get the cash you need than taking on a business credit line.

Investors usually provide you with cash upfront, in exchange for equity in your company. They might be individuals who find your business idea interesting or a syndicate of individuals who agree to pool together their money and invest it in your company.

Either way, getting investors is often much faster and easier than getting a bank or other financier on board.

#3. Take Out a Small Business Loan

In most cases, a bank or other traditional financier will be reluctant to fund your business. This is because they see little or no return on the risk they are taking.

But there are occasions when banks are eager to provide small business loans. This is especially true in the technology, medical devices, and clean-tech sectors where banks have been more eager to invest than other areas.

#4. Diversify Your Funding Sources

If you’re working with a limited amount of capital, it’s important to diversify your funding sources. This can help protect you from a downturn in your industry or your company’s overall performance.

You can diversify your funding sources by taking a percentage of your revenue and investing it in a hedge fund, venture fund, or other type of alternative fund.

This helps guard against a downturn in your industry and keeps you from relying too heavily on one source of revenue.

#5. Ask Family and Friends

You might be hesitant to ask your family or friends for money, but that’s often a mistake. Tapping into the informal network of friends and family is often much easier and quicker than pitching venture capitalists or banks.

There’s no need to feel as if you have to pay them before they feel as if they have to give you money.


Raising small business funding is possible, and it doesn’t have to be a struggle. The most important thing is to not give up. Remember that there are plenty of ways to get the money you need, and don’t be afraid to try something new. After all, this is the only way you’ll find a path to funding that works for your company.

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