Great idea. CHECK. Perfect Business Plan. CHECK. Eyes on the prize. CHECK. Start-up funding. Ummm…

You have the perfect plan for the perfect business, but start-up funds are usually the biggest challenge when starting out. The first thought is always “Wow, I’ll NEVER get the cash to start that business.” Funding your start-up may not be as hard as you think. Here are 8 resources to gain start-up funds for your new business.


Small business loans are typically the first thing that come to mind when planning funding for a new business, but often the ton of paperwork and the assumption that you will automatically be denied is a discouragement. Fortunately, with today’s economy, many financial institutions are starting to cater to the small business owner and have created programs specifically for entrepreneurs, backed by Small Business Association (SBA) loans.

These programs are excellent because for a regular business loan, banks require you to show proven cash flow and enough assets/revenue to cover over half of the loan that you want. Bank of America calls these requirements the “5 C” (Capacity, Capital, Collateral, Conditions, and Character). Reality check – Will you be able to meet these requirements when starting a business?

The following are a few banks that offer business loan programs:

Comerica Small Business Administration (SBA) Loans – provides up to 90% financing and a longer loan period (up to 25 years)

Bank of America – Offers the services of small business advisors and a smooth application process.

Chase – Provides four different types of loans – SBA 7(a) Loan Program, SBA Express Term Loan, SBA 504 Loan Program, and SBA Express Sub–Programs.


Personally, I have this love/hate relationship with borrowing from friends & family, but it works for some people, simply because these types of loans are convenient. Not a ton of paperwork to fill out and it often has a very low interest or is interest free all together. I’m not trying to be a Negative Nancy, but the bad thing about this type of loan is that it can make your relationship with this person(s) awkward, if it takes you longer than planned to pay back. Your lender may also feel as if you “owe” them for the rest of your life. Think long and hard about a family/friend loan, considering the personality of your lender and your relationship with them.


Maybe you have all of the ideas and a plan for your business, but an associate of yours has the extra money and an interest in what you do. You may want to consider taking on a business partner or multiple partners. There are, of course, good points AND bad points about being in a partnership which includes legal considerations. Here is an excellent article on starting a partnership from the Wall Street Journal – How to Start a Business with a Partner


Ever watch the show, Shark Tank? Because of this show, angel investing is becoming more and more popular in the entrepreneurial world. Angel investors are often millionaires (or billionaires), who are looking for the latest and greatest to invest their personal money in. The benefits – this can be the extra cash to get you to the next level, in addition to you gaining a great mentor. The disadvantage – more than likely, you will be giving away a piece (or pieces) of your business. The Forbes article, Angel Investors: How the Rich Invest, sums up angel investing perfectly.


Crowdfunding is a method of raising money via the support of strangers (and of course, people that you know) online. You tell your “story” (pretty much a summary of your business plan), set an amount that you would like to get for start-up, and wait for people to donate to your cause. If you reach your set amount by the set date, you get the money. If you don’t, those who attempted to invest in you don’t lose anything. I will go into more detail about crowd funding in another article.


Grants are pretty much free money, but not easy to get. First, check with your local government to see what type of grant opportunities they offer. The federal government also offers grant opportunities for specific sectors, such as products that aid in “going green “or services for economic development. is an excellent source for federal government grant information. Last but not least, are the private grants, such as Comerica’s Hatch Detroit and the Amber Foundation Grant.


Oooh, that mischievous credit card with the $10K credit limit that is just collecting dust in your wallet. The credit card is like the angel and devil battling on your shoulder. Good thing about it is that, it’s instant financing satisfaction. Bad thing is that you can quickly dig a 6ft hole for your credit score. You definitely need to have a Plan A, B, and C when it comes to using that credit limit.


Although some financial planners do not recommend it, your 401(K) or IRA can be looked at as sources of income by withdrawing money from or taking a loan from it. If you go this route, you are starting your business virtually debt free, but you risk the relaxation and comfort of your golden years if your business goes kaput. Learn more with Wall Street Journal’s article, Funding a Start-up – How to Tap an IRA or 401(k).

There are an infinite amount of resources out there for methods of financing the start-up of your business, but I would highly recommend starting off with the U.S. Small Business Administration’s page @

Question: How did you fund the start-up of your business?