How to Finance Your New Business Without a Loan


How to Finance Your New Business Without a Loan

By Dr. Teresa R. Martin, Esq.

It takes money to make money...

Though some have debated the validity of this aphorism, when it comes to starting a new business, it is an unavoidable fact. Even the most simplest of business ideas will require some kind of monetary investment on your part. For example, you may need an upfront amount of cash that can be used to for equipment, supplies, and other business expenses. You may also need to provide for your personal living expenses until your business starts generating money. Finally, you should also realize that there is the indirect cost of the time and energy you put into your business that you could potentially be using to earn money in other ways.

So, how can you quickly generate a little money for your new business without having to apply for a loan? It may be easier than you think. Here are 5 sources to consider:

Take on a business partner. By bringing in a partner, you will be able to combine your resources and thus have larger pool to draw from. A good partner may also offer a certain degree of business or life experience that you may be lacking. Just a word of caution, though: make sure both you and your partner sign a well-written partnership agreement beforehand.


Turn to friends and family. Present them with a good business plan, and friends and family might surprise you with their generosity. But keep in mind that your financial agreements with those closest to you may affect the quality of those relationships.

Seek out alternative financing. If you have a good credit score, then alternative financing may be a good option. Alternative business financing includes, online micro loans, business cash advances, and business lines of credit, such as those offer by Prosper, Lending Club, OnDeck, REIFA, Kabbage and While the funds generated on these platforms may be a bit more expensive than a traditional bank loan, they have the advantage of a quick approval process.

Find an investor. Funding can come from an outside investor who is interested in your line of business. Some great resources to check out include:, the Angel Capital Association, and OurCrowd.

Keep your day job. Finance your side business with income from your regular job.  You will have to curtail your spending while you siphon extra cash to your business. Eventually, you can reach your goal of leaving your job to run your business full-time.