8 ways you can raise funds to start a business


You’ve come up with a business idea but you have no capital. Don’t give up on it! There are plenty of options you can access that will enable you to come up with the funds you require for your idea to come to pass.

1. Get a bank loan

Despite what you might think, most banks are actually quite willing to fund start ups by issuing what they call start-up loans.

You must, however, have a solid business plan to backup your application. The plan should be well structured and well researched and must address things such as profit projections, your modus operandi  (the way in which you shall do the business), and the time in which you are anticipating getting a full return on your investment.

2. Crowdfunding

This is the process of raising funds online. You do not even need to be tech savvy to be able to use this method, it’s so straightforward and user friendly. Here’s how you can go about starting a crowdfunding campaign:

Prepare a pre-launch campaign with information about your business, and come up with the ways you will engage people. This should include the social media platforms you will use for the campaign.

  • Find a target audience. The key is to identify the right people and recruit them as ambassadors for you. Word of mouth will help you initially to spread the word about your campaign in a budget-friendly and trustworthy way. If you are able to grasp an audience even before the launch of the campaign, you will have a greater advantage. You can use platforms such as Twitter, Facebook, Instagram etc., to advertise and get the word out there.
  • Utilise Facebook. With over 2 billion users, Facebook is the best platform to market your campaign. Let your ads target a specific audience and get the maximum number of sign-ups. The beauty of Facebook is that it allows you to target your audience using demographics, gender, age, location, etc., which makes it a great platform to use for start ups.
  • Create a newsletter. Statistics show that newsletters are still the no.1 most effective method of getting people to take action. Come up with a newsletter to alert the public or let them know what you are about to do. This will enlighten them on your upcoming campaign and can also be the source of the initial sign-ups. Use any method possible to let the public know.  Nothing is outdated.
  • Nurture your subscribers. Once you have your first sign-ups, now nurture them into ambassadors. Send them several emails before launching the campaign, and ensure your story is presented and your position valued by each one of them. Go a step further and connect with each of them on a personal level so they understand your story more intimately. You then have the beginnings of a great campaign.

3. Seek an angel investor

Angel investors are people with plenty of money who are willing to invest in new business ideas. This is what you see in the popular TV show ‘Dragon’s Den’.

What you need to do is prepare a business plan, and visit the investor with a clear analysis of what you need, how you are going to achieve your goals and the length of time you need to make enough money in order to pay them back.

If your idea is good enough, you may just end up with an investor, but, bare in mind that they will sometimes want to have a piece of your company, or they may even decide to buy it from you.

4. Get a loan from a Microfinance Institution

This is yet another option you may well have at your fingertips. The beauty of a microfinance institution is that it offers a much lower interest rate compared to the banks. You may, however, be required to become a member of the institution first, and even save some amount money with them before they will entrust you with a loan.

5. Seek venture capitalists

Venture capital is a type of funding that is available to new and growing businesses. It comes from venture capital firms who specialise in funding new and high-risk business ideas. In this process, the firm will offer start-up loans to new firms in exchange for equity.

It is not always easy to find a venture capitalist who is willing to invest in your business idea, because they ideally look for the next big thing, and as such, many entrepreneurs find themselves bending over backward in order to showcase their idea as bigger than it probably is.

This is also a short-term investment, and the capitalist will want a return on their investment as quickly as possible.

6. Pursue a grant

You can opt to source money for a grant from the government. Most governments have money set aside to fund new business ideas. These are non-repayable gifts offered to businesses who fit a particular set of criteria. If you are lucky enough to win a grant, it is one of the best, risk-free ways to raise capital for your new idea.

But the process by which you can secure a grant is normally very long, and the competition is extremely high, meaning your chances may be very limited. The number of people trying to win a grant from the government is many, and the money is sometimes too small on its own to pay for everything so you may need so have a back up with this option.

7. Borrow from friends

You could consider borrowing from your friends and relatives and well-wishers as well who are willing to get involved in your new start-up business. Often people who know you and can see your passion for your project will be those who believe in you the most.

8. Save some money

You could put off the idea for a couple of months or years in order to save the money on your own, and come up with the much-needed start-up financing. This way avoids all the stress of applying for external financing and worrying about your ability to make repayments.


The above are just some of the ideas you can employ in order to source the much-needed funds to start your new business. If one doesn’t work, do not give up, just try the next one, and the next one, until you are able to find what you need to start your company. The key to this process is never giving up, because you may not know exactly what you have in your hands until you try.

Howard Fritz
My name is Howard Fritz. I'm a full-time blogger for who loves to share finance & business news. In my free time, I love to learn, read, and travel.

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