20 New Strategies To Fund Your Business in 2023

Having a big, billion-dollar business idea for a new company or start-up is great—but now what?


So, you need a website, an office space, a tech team, and, at least enough cash coming every month to pay your rent.


Which means you need money. Whether it’s a new app or a café, most entrepreneurs require a minimum of funding after pitching a business idea to get off the bottom in their early days.


Despite the long list of ways to fund your business, it is difficult to understand which funding options are available for you and how you will optimize your growth potential.


That leaves many entrepreneurs with similar concerns about financing their business. Here are 20 new strategies to fund your business.


New Strategies To Fund Your Business



Crowdfunding allows you to raise your funding from a large group of individuals. While they aren’t investors, they do possess an interest in your product.


These supporters will provide you with money for your business in return for some sort of gift or perk.


This might include access to your product or services, a place in your business, or an in-person meeting with you.


Crowdfunding websites such as Kickstarter, GoFundMe, and Kiva have been able to post online appeals for cash.


“As an entrepreneur, you don’t want to increase the risk of investing in your business and spend your investment options at such an early age,” Igor Mitic, co-founder of Fortunly.”


It is important to read the fine print of various equity crowdfunding platforms before choosing one to use. Some platforms have payment-processing fees or require businesses to boost their full financial goal to keep any of the money raised.


Peer-To- Peer Lending

In this, you can borrow money from another person instead of going to a bank or credit union.


In peer-to-peer lending, a borrower raises a loan request on a platform – such as Lending Club or Prosper – stating the amount required and reason for the loan.


Potential investors review the request and agree to loan various amounts of money to the borrower up to the required amount.


Once a loan is funded, the borrower receives the total amount lent and then they pay the loan back. This is through fixed monthly payments made to the platform. Hence the investors get repaid supporting the quantity each one lent.


“In its simplest form, firstly a borrower creates an account on a peer-to-peer website that keeps records and, then transfers funds and connects borrowers to lenders,” Kevin Heaton, CEO and founder of i3.


Business Grants

A key benefit to pursuing business grants as funding is that the grants don’t need to be repaid.


Also, the organization that gives the cash isn’t involved in your business.


Startup grants are offered at federal, state, and municipal/local levels for a wide range of specialized businesses.


However, because the money is essentially “free,” you’ll have to do considerable work to get these grants, including creating an in-depth business plan and roadmap for success.


They are hard to win because numerous entrepreneurs are vying for them.


There are numerous online directories to assist you to find grants, including sites like Grants.gov, GrantWatch, Finder and, The Fundraising Authority.


Credit Cards

Credit cards are often a simple way to get access to credit, offering the simplest way to purchase certain items and buy them anywhere from 30 to 90 days or longer.


While it’s better to pay a Mastercard off every month, it’s possible to increase repayment on items purchased within the credit limit provided.


Often, these credit cards accompany perks that add value, like points to place towards travel or product. The card could also offer cashback rebates, saving you extra money.


To qualify, you’ll need your credit score to be in the mid-600s or above. You’ll be asked to sign a personal guarantee.


In personal guarantee, a social security number is required and your business information.


Family and Friends

There are benefits of getting funding from family and friends. Since they already know and trust you, they’re more likely to believe in what you’re doing and will be willing to assist you.


They do not have very stringent repayment terms and conditions. Friends and family may consider a low or no-interest loan or perhaps equity in your startup in exchange for the funding. 


They are less likely to put pressure on you for quick repayment.


You can go through platforms like Zirtue to make things less complicated. With this platform, you’ll set your loan amount, determine the terms and conditions, and select a friend or family member.


Once they agree to your terms, the loan will be funded and you’ll make payments like every other form of a loan.


Product Presales

One of the foremost overlooked methods of financing involves the selling of products before your business launches.


This is referred to as product pre-sale financing and can be done in certain situations.


The product has to be fully developed, though. An attempt to presale products that aren’t ready for the market can be dangerous for the future.


Bittylab, which sells breastfeeding accessories, is a good example of product pre-sale financing. The company was able to raise $50,000 in just two weeks, before its actual launch.


This $50,000 went back into the business, increasing the value of the company and eliminating the need to take on debt.


IRA Or 401(K)

If you are planning to work on your business full time and have $50,000 or more in your IRA, ROBS is an option.


With the ROBS structure, you incorporate your new business and open a new 401(k) thereunder. 


Then you roll over to your current pre-tax IRA or 401(k). The advantage is, you can use all of your retirement funds and it’s tax-free.


Since ROBS isn’t a loan, you won’t have to qualify. But there are a few requirements:

  • You’ll have to register your business as a C-corp.
  • So, you need to be an employee of the company.
  • You must have a 401(k) or traditional IRA. Roth IRAs aren’t eligible.


Angel Investors

If you can’t get enough cash from the bank or your assets and you don’t have a richy rich uncle, you’ll always search for a wealthy non-relative.


Angel investors are individuals who invest their funds in smaller startups that are just starting often in exchange for an equity stake in the new business.


Angel investors offer funding to get your business off the ground. Also, some are willing to provide guidance based on their own experience. 


They can leverage their existing contacts and will open doors for your business.


Just go through these organizations such as MicroVentures, Alcor Fund, Alliance of Angels, and Band of Angels that can put your business in contact with angel investors.


So, if you want to go to the angel investor, practice your pitch thoroughly.


As quickly as possible, you would like to make clear why your service or product will be a success with consumers, why your business will stand exceptionally in the market, prove that you are the right person to run the business, and the return on investment the angel can expect.



Business incubators are a corporation dedicated to providing services and support to fledgling companies.


Business incubators are generally run by venture capital firms, universities, and government agencies, to nurture new business through their earliest stages. 


This is done by providing marketing, networking, infrastructure, and financial assistance.


Idealab is a good example of a business incubator. 


To get involved in an incubator program, a prospective business owner must complete a lengthy application process. 


Additionally, requirements differ among various incubators, but the entrepreneur must present a strong likelihood of success for the business.


Competition for a spot in an incubator will be very difficult. A list of business incubators in the U.S. is mentioned in the National Business Incubator Association.


Bootstrapping/Self Financing

Bootstrapping means financing your company by scraping together your funds. This includes your credit cards, bank account, and any home equity lines you’ll have.


In this, you won’t have monthly payments and extensive loans, especially if you run into snags along the way.


But, if you’re looking to scale your business quickly, it will be advantageous to usher in outside sources of funding.



Small Business Administration offers microloans up to $50,000 and therefore the average loan is $13,000. To know if your business qualifies, first find a microlender(pdf) in your area and know what you need to qualify.


Typically, you would like to be in business for 2 years before you’ll qualify for an SBA loan.


The SBA offers that all microloans should be repaid within 6 years. Interest rates on microloans are negotiated between the borrower and the lender but typically fall between 8% and 13%.


Intermediary lenders have requirements for Microloans, including personal guarantees & some form of collateral. If you have weak credit scores or few assets and would likely secure funding then just apply for microloans. 


Venture Capital

Venture capital firms make direct investments in fledgling companies in exchange for equity stakes within the business.


Unlike angels, venture capitalists don’t invest their own money. Rather, they manage funds of millions or billions of dollars spread across a variety of various investments.


Some of the well-known Venture Capitalists are – Nexus Venture Partners, Helion Ventures, Kalaari Capital, Accel Partners.


Bank Financing

A common method to obtain startup funding for a brand new business is through a loan. 


If a bank offers lending options to small businesses, they’ll ask you to fill out an application form. From start to end, this process can take anywhere from a few weeks to 2 or 3 months.


Most loan applications will start by asking you for basic information about the business, the legal structure, the kind of business you’re running, what products and services you sell, etc.


You’ll be asked for a lot of monetary information and confirmation that you’re in good standing with the secretary of state.


By Winning Contests

An increase in the number of contests has tremendously helped to maximize the fundraising opportunities.


Winning these competitions can even get you some media coverage.


You need to make your project stand out to boost your success in these contests. You can either present your idea personally or pitch it through a business plan.


MIT $100K, Postcode Green, and Seven Ventures are some of the popular startup contests.



You’ve been in business for a short while and you’ve got customers, but your collections are bad.


You need cash now, but you are lacking cash inflow and that is holding you back. What can you do?


A common solution to this problem is factoring. Also, you secure a loan usually at a high-interest rate against your accounts receivable.


Factoring companies aren’t hard to search out, and a few offer better deals than others, but they always aim to charge you a far higher rate of interest than your bank.


Thus, factoring is typically considered as an option only in any case others are exhausted.


Business Credit Cards

Business credit cards are an effective financing option. You can use them for everyday purchases you’re likely to make anyway, like your office supplies.


You can also use them for advertising and other business expenses.


Business credit cards are useful if you qualify for a low introductory rate.


A credit card with an interest rate of 16 – 18 percent is less expensive than other business financing options, but remember, they generally offer higher rates.


Business credit cards provide fraud protection. If you are planning to use credit cards to fund your small business startup, it’s best to use cards offering rewards or cash-back programs for business purchases.


Also, if you plan to borrow the money for a short period – 18 months or fewer – look for credit cards with a low or 0% introductory annual interest rate (APR).

Selling Stock

Selling stock in your organization can take many different forms. We’ve all heard and browsed plenty about initial public offerings (IPOs). 


IPOs are stock sales within which previously private companies go public.


An IPO is for an ongoing business, but it isn’t likely to be a viable alternative for your new company.


A private placement is less complex than an IPO and involves selling shares of stock to choose a group of equity investors.


The investors exercise control over your organization in direct proportion to the number of shares that they own.


Selling stock or other securities in your business requires compliance with state and federal securities laws.


Seek the recommendation of an attorney in these laws before your business issues any securities or stocks.


Customer/Supplier Financing

This is an option for a business that incorporates a poor credit rating and is a practical option that a lot of small businesses overlook.


So, your business bills for the services or products that it supplies up.


The rest of the fees are paid once the products are delivered or if the services are completed.


This strategy is aggressive, but many of your customers can appreciate the necessity that a small business must keep cash flow current, and won’t object to your requesting partial payment upfront.


Your Day Job

If you currently have a job that’s meeting your expenses and letting you reside a comparatively comfortable lifestyle, don’t be in such a rush to quit your job and follow your business dreams.


Spend a while getting the business off the bottom and building through the first, difficult phases with the solidity of your 9-5 job paying your bills.


This allows you to build your business with fewer compromises and allows you to stay faithful to your vision without any financial pressure.


You can also get a good experience from your day job that will assist you to run your company down the road.


Lending Companies

These are the companies that bring lending but are more modern and dynamic than a bank. 


The main feature of this method is that they don’t ask too many requirements, and provide online registration forms to check availability for loans.


These lending companies support startups and small businesses, by providing funds for their companies.


Some examples of these companies are Capital One, Lendio, and Kabbage, which can help you to find credit cards, auto loans, provide savings or checkings accounts and bring you banking services without being a bank.


Wrapping Up

So, unless you’re already a millionaire, putting together the financing to launch a new business will take your planning and effort. 


With the help of due diligence and analyzing the downsides of available funding options will help you in weighing the downside of fundraising at every step.


Even if you land a significant bank or SBA loan, you may still need additional cash from friends and family. Remember that there will be unanticipated events and expenses.


So, plan wisely on choosing your funding options as these will be the main pillar leading your company to the path of success.

Claire Mark

Claire Mark is an investment and strategic planning consultant at Alcor, a global investment bank. She’s best known for her insightful blogs on business growth, startups, small businesses, and investments. Claire also has a good network in the Finance industry, especially the investors’ community. Apart from her work, she loves to bake and go out for gadget-free nature walks.

1 Response

  1. Aniyah Berger says:

    Love this! Thank you for sharing!

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