6 Creative Ways to Finance Your Business
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6 Creative Ways to Finance Your Business


For the last five years or so, small business owners looking to banks for help financing their operation have been like nomads wandering a desert in search of a drink. Help is out there – somewhere! – but where?

The FDIC says that small business loans declined by 27 percent from 2008 to 2013. About 43 percent of small business owners applying for loans were denied funding, and one-third of them had their credit lines slashed.

In short: Banks don’t want your (small) business.

The good news is that there is a growing pool of possibilities that might get you the financial jolt your business needs. Some you’re probably familiar with – asking friends and family,  Small Business Administration loans, selling annuities or structured settlements, angel investors, credit cards – but those ideas have been around long enough that everybody who wants to, could have tried them. Try something different.

Here are six new ideas. Some of these you might consider a stretch. Some might have too much risk/reward for your liking, but there is a positive side to all of them: They don’t involve going to a bank.

6 Creative Ways to Finance Your Business 

  1. Contests and competitions. Big companies run contests offering free office space, equipment, distribution possibilities and sometimes, money. Just search online for business contests or competitions, and you’ll be surprised at the possibilities. Aidan Augustin, who formed a start-up software company called Feathr, got a huge boost when his four-employee staff entered a contest called the “Largest Hack-A-Thon In History,” sponsored by Barracuda Networks. His team beat out 130 teams from across the country, won $25,000 and, more importantly, gained enough contacts to expand the business.
  2. Crowdfunding. This is fast becoming the most popular way to fund a new business, and for a good reason: You don’t have to give away any equity in your company. Kickstarter, Indiegogo and others have taken a very good concept – everybody pitch in a little, and it adds up to a lot – and turned this into a profitable choice. Crowdfunding raised $3 billion in 2012 and is expected to double to $6 billion in 2013.
  3. Apply for $$$ from the high-tech guys. Lenders like Capital Access Networks and Swift Capital eliminate paperwork and multiple visits to their offices. You do everything online and get an answer that day, sometimes that minute! Swift Capital claims to approve 80 percent of applications and has provided more than $300 million in funding.
  4. Small business incubators. Universities and local governments want your business to succeed and could offer office space, support staff and mentoring at little or no charge. Neal Ormsbe got professional and financial help from professors at the University of Florida for a software business he and his roommate started. Their business has mushroomed to 12 full-time employees in just over two years.
  5. Bartering. You are trying to trade products and services you have for products and services you need, hopefully to your advantage. If it allows some of your cash to go toward paying employees instead of spending on product or services, then count it as a positive.
  6. Do it yourself. OK, not exactly a new idea, but let’s face it, none of the ideas offered here  or anywhere else are going to work if you’re not going to put in the time, effort and some of your own money. If you do that and clearly define your business goals, organize the company’s work flow and compile accurate reports of how you’re doing, you’ve got the kind of story investors want to hear.


Bill Fay is a business writer for Debt.org, focused mainly on stories about financial matters affecting families and small businesses. He has 30 years of experience working in newspaper, radio and television, mostly dealing with college and professional sports. 

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