A Complete Guide to Getting Funding for a Business: Top 19 Financing Options

Types of Business Financing Options

There are three broad categories to consider when getting funding for a business: debt, equity, and non-dilutive capital. Each category includes several specific products, and each comes with its own trade-offs around cost, control, and speed.

• Debt Funding

Debt funding means borrowing money and repaying it over time, usually with interest. It is the most common route for getting funding for a business, as it lets owners keep full ownership.

1. SBA Loans

SBA loans are partially guaranteed by the U.S. Small Business Administration, which reduces risk for lenders and often results in lower rates for borrowers.

• The SBA 7(a) loans cover working capital, equipment, and acquisitions up to standard program limits.

• SBA 504 loans are built for real estate and major equipment purchases.

• SBA microloans serve very small financing needs, often under $50,000.

• Approval can take several weeks, but the repayment terms are usually favorable.
• SBA also partners with CDFIs and banks to distribute these small business loans.

2. Bank Loans

Traditional bank term loans work well for established businesses with a strong credit history.

• Banks typically require two or more years in business and a strong revenue history.

• You will need to submit tax returns, bank statements, and a business plan.

• Many owners start their search with their existing bank relationship before comparing other lenders.
• Rates are often lower than online lenders, but approval timelines are longer.
• Getting funding for a business through an existing bank relationship often shortens the underwriting process.

3. Business Line of Credit

A business line of credit is similar to a credit card, giving you revolving access to funds you draw on as needed.

• You only pay interest on what you use.
• It is well-suited for managing seasonal cash flow gaps.
• Approval is often faster than a term loan.

4. Equipment Financing

Equipment financing uses the equipment itself as collateral.

• Loan terms usually match the useful life of the equipment.
• Approval can be quicker since the asset secures the loan.
• This option fits contractors, medical practices, and manufacturers well.
• Equipment financing is one of the more accessible options for asset-heavy businesses.

5. Microloans

Microloans are small loans, often under $50,000, aimed at startups and underserved business owners.

• Nonprofit lenders and community development financial institutions issue most microloans.
• They are a practical answer for owners exploring how to get a startup business loan with no money saved up for a down payment.
• Terms are often more flexible than bank loans.

6. Invoice Financing

Invoice financing advances cash against unpaid customer invoices.

• It helps businesses with long payment cycles bridge cash flow gaps.
• The invoice itself typically serves as collateral.

• Fees are charged instead of traditional interest rates.

7. Merchant Cash Advances

A merchant cash advance provides a lump sum in exchange for a percentage of future sales.

• Repayment adjusts with daily or weekly sales volume.
• Approval is fast, often within a day or two.
• Costs are generally higher than other debt options, so use this route carefully.
• This option works best when getting funding for a business quickly matters more than minimizing fees.

Whichever debt option you choose, most lenders will require your business to have an EIN (Employer Identification Number). An EIN helps keep your business finances separate from your personal finances and allows lenders to evaluate your business more accurately.

Getting funding for a business through debt may also require a personal guarantee for newer companies. Getting funding for a business through debt may require a personal guarantee for newer companies, even when you apply for a business loan with an EIN and a registered business entity.

• Equity Funding

Equity funding means exchanging a share of ownership for capital. There is no repayment schedule, but investors expect a return through business growth.

1. Bootstrapping

Bootstrapping means funding the business from personal savings, early revenue, or reinvested profits.

• You keep full ownership and control.
• Growth is often slower without outside capital.
• This approach works well for owners who want to delay formal borrowing altogether.

2. Angel Investors

Angel investors are individuals who invest their own money in early-stage businesses.

• They often bring industry experience and mentorship along with capital.
• Deals are typically smaller than venture capital rounds.
• Expect to give up a meaningful ownership stake.

3. Venture Capital

Venture capitalists or venture capital firms invest larger sums in businesses with high growth potential.

• Funding usually comes in stages tied to milestones.
• These venture capitalists often become board members and take an active role in governance and strategic planning.
• This suits scalable, high-growth businesses.

4. Crowdfunding

Equity crowdfunding lets many small investors buy shares through an online platform.

• It can build a community of invested customers.
• Regulatory rules limit how much can be raised and from whom.
• Campaigns require marketing effort to succeed.

Getting funding for a business through equity works best when the business is rapidly growing, and you are okay sharing business control.

• Non-Dilutive Funding

Non-dilutive funding provides capital that never has to be repaid and never requires giving up ownership. It is one of the most attractive ways of getting funding for a business, though competition for awards is high.

1. Federal Grants: Government Grants for Small Businesses

Government grants for small businesses are available through several federal agencies.

• The Small Business Technology Transfer (STTR) and Small Business Innovation Research Program (SBIR) fund research and development startups working on federal priorities.

• Grants.gov lists open federal grant opportunities across agencies.

• Applications are detailed and often require a strong technical proposal.

2. State and Local Grants

Many state and city economic development offices offer grants to businesses that create local jobs.

• Programs vary widely by location and industry focus.
• Local chambers of commerce often maintain updated lists.
• Some grants target specific neighborhoods or revitalization zones.
• Checking local programs is a smart first step when getting funding for a business without taking on debt.

3. Minority-Owned Business Grants

Several programs specifically support minority business owners.

• The US Department of Commerce Minority Business Development Agency (MBDA) connects minority-owned businesses to capital and contracts.
• Amazon's Black Business Accelerator Program offers grants and mentorship to Black-owned businesses.
• Eligibility and award amounts vary by program and year.

4. Small Business Grants

General small business grant programs are open to a wide range of industries.

• The Awesome Foundation provides $1,000 no-strings-attached microgrants to support creative, innovative, and community-focused business.
• Verizon and LISC award $10,000 grants to eligible small businesses that meet the program requirements..

5. Women-Owned Business Grants

Grant programs for women-owned businesses continue to grow.

• The Amber Grant Foundation awards monthly grants to women-owned businesses, with an annual larger grant among past winners.

• Many programs also include mentorship and networking components.

6. Veteran-Owned Business Grants

Veteran entrepreneurs have access to dedicated funding and training resources.

• Boots to Business (B2B) is an SBA program that helps transitioning service members start businesses. Veterans Business Outreach Centers (VBOC) provide counseling, training, and referrals to funding.

7. Corporate Grants

Many large corporations fund small business grant programs as part of community investment efforts.

• These grants often target specific industries tied to the corporation's business.
• Application windows are usually limited and seasonal.

8. Business Competitions and Pitch Contests

Pitch competitions award cash prizes and exposure to businesses with strong concepts.

• Universities, accelerators, and economic development groups frequently host these events.
• Winning can also lead to media coverage and investor introductions.
• For pre-revenue companies, competitions can be an unexpected way of getting funding for a business before sales even start.

How to Choose the Right Funding Type

Choosing the right approach to getting funding for a business depends on your growth plans, revenue stability, and comfort with sharing control.

Choose Equity Funding If...

• Rapid growth is the priority.
• You are comfortable sharing ownership.
• Revenue is not yet stable.

Choose Debt Funding If...

• Revenue can support repayments.
• You want to maintain ownership.
• Funding needs are clearly defined.

Choose Grants If...

• You meet eligibility requirements.
• You can wait through application cycles.
• You want non-dilutive capital.

Whichever category fits best, getting funding for a business becomes easier once you know your priorities upfront.

Bottom Line

Getting funding for a business is one of the most consequential financial decisions an owner will make. Most businesses combine approaches over time: bootstrapping early, adding a line of credit for cash flow, then applying for an SBA loan or grant as the business matures.

Review your funding options at least once a year, and revisit lenders, investors, and grant programs as your business evolves. Getting business funding is easier when you match the funding type to your stage and needs rather than defaulting to the first offer you see.