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There are many different routes you can take if you’re looking to raise money for your business.

Most small business owners look for commercial business loans or credit cards to fund their business needs. These sources of capital are popular and convenient choices but difficult to qualify for.

As a small business owner, you can look for debt, equity, and alternative funding sources at different stages of your business.

Let’s have a look at your options!

Small Business Loans

Commercial banks offer different types of debt financing options. You can choose from a wide range of loans including term loans, a line of credit, an overdraft facility, etc.

These loans require stricter qualification criteria and higher credit scores. You may need collateral or a personal guarantee to qualify as well.

Business Credit Cards

If you are looking for a small revolving credit facility, a business credit card is a suitable option for you. It offers the same flexibility as a line of credit loan and doesn’t require a complex qualification process.

However, business credit cards come with the highest APRs and are on the expensive side of the available financing options.

SBA Loans

The Small Business Administration (SBA) offers flexible loans to small businesses through its partner banks. The SBA and these banks require a higher credit score from borrowers usually but offer flexible loan terms.

SBA loans often come with lower interest rates and extended loan terms too.

Business credit cards are rather easy to qualify for, but come with high APRs.

Merchant Cash Advance

Online and private lenders can offer merchant cash advances as an alternative debt financing instrument. It works for businesses accepting credit card payments only.

Invoice Factoring

If your business has piled up unpaid invoices, you can turn these receivables into cash through invoice factoring.

A third-party invoice collection specialist can help you collect unpaid invoices against a percentage of the collected amount. Else, you can fully outsource the collection and receive a proportion of the total unpaid amount in advance.

Then, there are a few alternative financing options that often come under the equity financing category.

Angel Investors

Angel investors are a group of people or an individual investing in startups. If you have a bright idea and want to turn it into a business reality, seeking funds from an angel investor is a likely option for you.

Angel investors often provide smaller equity financing amounts to businesses at early stages usually.

Venture Capitalists

Venture capitalists (VCs) like angel investors invest in businesses through equity financing. However, VCs provide larger funding to growing businesses.

Venture capitalists often provide leadership and business management skills on top of equity financing as well. They often lead rapidly growing businesses through their growth stages.

The exit strategies for venture capitalists and angel investors are often through public listings.

Angel investors and venture capitalists may invest in your business if they find your vision and plan attractive.


Crowdfunding platforms collect money from the public and invest in businesses through equity financing. The business receives equity financing through crowdfunding platforms.

Many online crowdfunding platforms like GoFundMe, Kickstarter, and Indiegogo provide online equity financing to businesses.

Peer-to-Peer Lending

Peer-to-Peer lending means directly borrowing or lending money to other businesses in your industry. This concept eliminates commercial banks and other lenders.

Many online P2P platforms act as facilitators to businesses for lending and borrowing money from other businesses. This option is a useful alternative equity financing method.

Business Grants

Business grants are available through government entities and other business funding associations. These grants are particularly useful for businesses investing in research and development and new technologies.

You can search for business grants through SBA or Small Business Innovation Research program.

Business Plan Competition

A relatively newer trend for small businesses is to get financing through business plan competitions. If you have a unique business idea with a solid business plan, you can enter the competition.

These business plan competitions can be funded by government entities or large companies looking for newer business ideas.