10 Creative Financing Methods to Seed Your Startup

Great business ideas have been popping up since the dawn of modern commerce. Going from brilliant idea, however, to successful business venture usually requires more funding than most startups have on hand.

But this doesn’t mean your breakthrough idea has to flounder. In fact, these 10 tips for startup funding could be just what you need to get up and running:

The Bank of Mom and Pop

They supported you before, so perhaps they will again. The key here is to go about it like you would with any bank. Create a business plan, show that your idea is viable, and agree on terms to pay them back. They may say no, or they may surprise you with the best loan possible – one that doesn’t have to be repaid.

Angel Investor

These savvy entrepreneurs know what to look for in a successful startup and may be willing to help fund yours. Because they’ve been in your shoes, they can tell you what you’re doing right and where you need to improve. In return for their expertise, they’ll take a small agreed-upon cut.

SBA Loan

Small Business Administration (SBA) loans are government sponsored and specifically tailored to help fledgling businesses. Most banks offer them, but it pays to research which banks have the expertise to find the right one for you. For more on these programs, check out this link.


Crowdfunding turns small online donations into large sums you can use to launch your startup. Kickstarter, a site notorious for raising $55,000 for a man in need of $10 to make potato salad, has also funded hundreds of conventional efforts ranging from film documentaries to video games.

Tap Your Retirement Savings

Most financial advisors will recommend against this, however, if you have a great idea and the drive to make it succeed, using funds from a 401(k) or IRA is an option. You might take a hit on taxes, but if it puts you at the helm of a future Fortune 500 firm, it could be worth it.

Pair Down to Start Up

Most people have accumulated their share of possessions by the time they decide to launch a startup. If that Harley-Davidson Softail in the garage collects more dust than miles, consider selling it…and buying a new one once your business hits it big.

Leverage Credit Cards

Used judiciously, a credit card is a powerful tool. If you have the discipline to pay off balances quickly, the plastic in your wallet can be an instant influx of funds for short-term needs. These tips on using cards wisely can help.

Home Equity Loan

If you’ve owned your home for a while, your equity (the difference between what you owe and the home’s value) can be a tax-smart source of startup funds. Why? Interest you pay is 100% tax deductible, in most cases.


Many states sponsor competitions that reward good business ideas with cash prizes. Search the web for events in your area, or check with local business organizations to see what’s available.

Keep Your Day Job Until You Can Afford to Quit

Every entrepreneur has dues to pay. For some, it’s toiling in a corporate cubicle, for others, it may be waiting tables. Use this time to establish the good habits and hefty bankroll you’ll need so once you launch your startup you don’t have to look back.

Looking for even more inspirational startup stories? Click here for insights into the humble beginnings of some of the best-known companies in America.

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