How To Fund Your Business Without Taking Out a Loan

In order to succeed as a small business owner, you’ll need to start off on strong financial footing. Many novice entrepreneurs go right to their bank or credit union for a loan to get started.

But what if you don’t want to borrow large sums of money? There are plenty of ways to fund your business without taking out a loan. You don’t need to rack up debt in order to succeed in business!

Use Your Retirement Account

If you worked for another company before going into business for yourself, you may have some funds collecting dust in your retirement account. Several types of retirement accounts, including 401(k)s, are eligible to be rolled over into a new account in your business’s name.

Seek Crowdfunding Solutions

Do you have an innovative new business idea that you know your social circle will be interested in? Seek crowdfunding solutions on a platform like Kickstarter or GoFundMe. Tell readers all about what your business does and how you aim to help the community. Your friends—and their friends—can donate as much or as little as they want towards your success.

Enlist Private Investors

Network with other business-minded folks often enough, and you’ll likely rub elbows with potential investors who are always looking for innovative new businesses to finance. You won’t have to factor loan repayments into your budget, because accepting help from investors is not a loan. However, you will need to provide them a seat on your board of trustees—which means they have some say in your business decisions.

Fund It Yourself

If you are dedicated enough to making your business vision a reality, dig into your savings and fund your venture yourself! While this option is not viable for everybody in every situation, it’s a great funding solution when you’re just starting out. Plus, there is a wide variety of benefits to self-funding, including increased independence and more creative control.

You don’t need to be beholden to banks and other big lenders as a small business owner. You can absolutely fund your small business without utilizing a loan—you’ve just got to think creatively and believe in the merit of your ideas.