5 Ways on How to finance your Small Business Ideas

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Dreaming about 100s of Small Business ideas is relatively easy thing but launching a business is quite difficult than dreaming. It needs hard work and dedication. It also needs full attention of Entrepreneurs in order to lead their business up to the next level. But unfortunately majority of us, often restrict themselves only to Small Business Ideas and never take risk of launching a business. There are numbers of reasons exist that often create barriers for entrepreneurs to start or run their new business successfully. In all of these reasons, small business financing is considered to be the one of the major problems that entrepreneurs usually face while starting a new startup.

We also know that finance is a blood of business and without capital no entrepreneur can start a business successfully. If you’re an entrepreneur and have innovative small business ideas but still reluctant and worry about funding a business then believe me you’re standing at wrong side. In 2016, I believe that entrepreneurs have numbers of opportunities to finance a business as compared to previous years. You just need to write your compelling startup business plan in order to attract bankers and investors. Stay in touch with the article, following I’ve shared some ways through which you will get your answer about how to finance your small Business Ideas?

5 Best ways of Small Business Financing


1. Crowdfunding

We are living in a tech world and everything ends up at technology and internet. If you’ve any problem then you can easily fix your problems by just exploring the internet. You will find hundreds of solutions on different websites. Just like other issues, small business financing is also a major issue for business owners. In order to overcome this issue, today crowdfunding websites are on the horizons. Thousands of entrepreneurs had already funded their businesses through crowdfunding sites. If you want to fund your business, then you must explore the Best Crowdfunding Sites such as Kickstarter, Indiegogo, and fundable. All these websites are created to cater different needs of entrepreneurs. All you need to run your campaign effectively on these sites and you will get numbers of investors on these websites who are ready to invest in your proposed business.

Angel Investors

2. Angel Investors

Small business financing through angel investors is also considered to be the best option for entrepreneurs. Basically, Angel Investors are also entrepreneurs that help the other entrepreneurs just to make more money. Angel investor may be a single person or group of entrepreneurs. All you need to contact them and show your business plan. If they like they will invest in your business but in return they will demand equity in business. In my point of view, it is the best option for those business owners who have lack experience into the particular business lines. While starting a business, Angel investors can help you in difficult times and provide mentorship in order to run the business successfully. You can explore Small Business Development, Gust or SBA in order to meet with angel investors.

Family & friends

3. Family & friends

Funding a business through family & friends is the most traditional way in small business financing. But this method is still considered as low cost, trustable and reliable. You may find many people in your family or friends who blindly believe in you and ready to invest in your business. The one of the best thing is that this method is low cost. It means if you borrow some funds to finance your small business ideas then you’re not liable to pay any interest or cost of capital. On the other hand, if they insist or demand something in return, you can write a promissory note (bridge loans), which will be converted into business equity.


4. Incubators

Today, the trend of incubators is on its peak. If you have amazing startup ideas but worried about small business financing then no need to worry at all. There are numbers of incubators working at the national and international level, select the entrepreneurs which have innovative startup ideas and great potential to do it. They pick these guys, provide mentorship and incubate them. Incubators don’t provide direct funds to small business but they work as bridge between investors, companies and entrepreneurs. Different companies often make pre-contract with entrepreneurs in order to purchase future commodities. In this way, Investors supply funds to entrepreneurs to launch business and start manufacturing. When it is done, companies buy these commodities, and finally both investor and entrepreneur enjoy the profit on agreed ratio.


5. Microloans

Microloan is the last option that you can use to finance your small business. There are numbers of private companies and no profit organization working in the market that offer funds or small business loans up to $35000 in order to promote the culture of entrepreneurism. The good thing is that these loans are interest free or offered at very low interest rate. Example includes, SOHO Loans and Patriotic Express Loans.


Don’t know how to start business? Need ideas for starting a business? Read my blog posts:

Adil Zaman is Pakistani freelance writer and founder of fincyte. He loves to write on Small Business Trends and tech subjects.

  • Sebastian Klassman

    Crowdfunding is the number one strategy out there right now. The industry as whole this year has grown to over $35 billion us. I think it should be at the top of the list for small business, starting up or needing to raise funds. There are thousands of existing platforms out there, so you do need to research out well. What each offers in terms of use, fees etc;. Optionally you can also consider running your own crowdfunding website as well. There is software like that lets you run your unique crowdfunding white label website in minutes.

    • Adil zaman

      Thank you Sebastian for the recommendation. I’ll check your recommended software and try to include this one in my next post.

  • Sebastian Klassman

    Thanks Adil, and great job on the article.