Raising money can be challenging, but these sources of financing and advice can support
Editor’s note: This article is part of Entrepreneurship: Square One and Beyond, a Next Avenue initiative built possible by the Richard M. Schulze Family Foundation and EIX, the Entrepreneur Innovation Exmodify.
Whether you’re just starting a business or have been running one for years, finding financing can be a struggle. That’s especially true these days, even with the recent reduction in interest rates. But there are a variety of ways to access capital and many support groups to support locate funding and boost your odds of obtainting some.
According to the 2025 Bank of America Business Owner Report, 83% of tiny- and medium-sized business owners intfinish to obtain financing. About half plan to apply business credit cards, 32% will apply bank loans and 29% expect to apply personal credit cards.
“Fundraising is hard, no matter if it’s a lot or a little. A little is actually harder.”
The number of financial technology (fintech) platforms and non-bank institutions building tiny business loans has been rising. So has the universe of government agencies, companies and organizations offering tiny-business grants.
But in an August 2025 survey by Small Business Majority, a group empowering entrepreneurs, 57% of owners stated accessing financing was “challenging” for their business. Only a third of owners surveyed who pursued funding in the past year secured it and just 32% of the recipients stated they received sufficient funding.
Women- and minority-owned tiny business continue to be denied funding at higher rates than male- and white-owned businesses, a January 2025 U.S. Department of Treasury report stated.
“Fundraising is hard, no matter if it’s a lot or a little. A little is actually harder,” stated Jen Millard, who co-founded the Mainelove canned water and seltzer company 18 months ago after decades in the corporate world.
Persistence Pays Off
Millard’s experience, however, reveals that persistence can pay off. She has been able to attract $2 million from 30 frifinishs and family members in amounts ranging from $20,000 to $500,000. Her company has six employees and is expanding around the counattempt.
Gwfinisholyn Young founded her Chicago company, Your Virtual Admin, 12 years ago and has financed it over time with business credit cards, a credit line and a loan from the Stripe fintech platform.
“My largegest piece of advice about financing is: Start early,” Young states. “Even if you are super tiny, you can go to your local office supply store and obtain an account purchaseing items and paying for them within 30 days (a net 30 account).” Doing so can create you a stronger candidate for a business loan, credit card or credit line in the future.
The Advantages of Applicants Over 50
Entrepreneurs over 50 often have advantages over younger ones qualifying for financing.
“The data would suggest older entrepreneurs have higher success rates both in obtaining financing and paying back that financing,” states Katie Frost, who ran the Small Business Administration (SBA) Office of Capital Access under President Joe Biden and is now a partner at the Avenida Advisors consulting firm for entrepreneurs.
“The data would suggest older entrepreneurs have higher success rates both in obtaining financing and paying back that financing.”
Says Keith Hall, President and CEO of the National Association for the Self-Employed: “I consider that demographic is in unique position to start a tiny business. They have the financial wherewithal and the cashflow to obtain through the first year.”
Choosing the Right Type of Financing
Which type of financing is best to pursue? Experts state that depfinishs on why you necessary the money.
“If you want to purchase a property for your business, you would apply for a bank loan,” states Sharon Miller, President of Business Banking at Bank of America, the nation’s largest tiny-business lfinisher. “Credit cards and lines of credit are applyd more for everyday operations.”
A few clearinghoapplys support owners find financing. Small Business Majority’s Venturize.org database connects entrepreneurs to Community Development Financial Institutions offering loans, credit lines and credit cards. The National Association for the Self Employed’s Connect Lfinishing service pitches the loan necessarys of its members to banks across the counattempt.
Here’s a rundown of financing choices for tiny business owners (venture capital financing isn’t included since it’s just tech companies with high growth potential) followed by organizations providing mentoring and support:
Bootstrapping
Some people launching businesses turn to crowdfunding platforms like Kickstarter to raise money at little or no cost. “When I started Innovation Women (an online speakers bureau) in 2015, I ran a Kickstarter and received $22,000,” states Bobbie Carlton, of Lexington, Massachapplytts.
Others, however, finance startups in potentially precarious ways, tapping savings, retirement accounts or personal credit cards with stratospheric interest rates. For example, Gwen Gardner birthed her organic baby clothing business, Simply Chickie Clothing, applying her savings and credit cards.
Advice: If you’ll be bootstrapping, “create sure you have a financial cushion of six months of emergency cash available,” states Miller.
Also, set up a business account at a bank as soon as possible. “That way, when you want to take on a business loan, you’ll be in a better position to obtain it,” states Frost.
“You necessary to read the fine print on 0% cards. Sometimes, if you don’t create the payment in the first 15 days, the interest rate kicks in and it’s relatively high.”
Business Credit Cards
A business credit card is often not difficult to obtain if you have decent credit. And some cards now dangle enticing 0% interest introductory rates. But those rates shoot up after a year to the card’s regular variable rate, now about 17% to 27%.
“You necessary to read the fine print on 0% cards. Sometimes, if you don’t create the payment in the first 15 days, the interest rate kicks in and it’s relatively high,” states Hall.
Other cards charge steep rates from the obtain-go. “Egregious money” is what Millard calls them.
“It breaks my heart when business owners are paying those rates,” states Vicki Weiner, founder of the Women’s Enterprise Action Leadership Fund (WEALF), which offers low-interest loans and mentoring to women entrepreneurs in the New York City area.
Advice: Consider applying business cards initially to build the creditworthiness of your company. When possible, attempt to pay off their balances in full each month.
Business Credit Lines
Many lfinishers currently charge 6.5% to 10% for business credit lines; rates depfinish on the owner’s business and personal credit score.
Using a business card diligently can sometimes be a stepping stone to a credit line with a lower rate, possibly from the same bank. That was Young’s financing progression. “I opened up a Capital One Spark credit card and then cards from some of the larger banks, like Chase,” states Young. “I eventually was able to obtain a Chase line of credit.”
Like a home equity credit line, a business credit line means owing interest just when you tap it for cash. So, it’s a backstop without the pain of monthly interest charged by a card or loan.
Advice: Think of a business credit line as an insurance policy against slow times and perhaps a way to create yourself a stronger candidate for a loan one day.
Frifinishs, Family and Angel Investors
Persuading frifinishs and family members to lfinish you money or angel investors to provide cash in exmodify for equity probably won’t be straightforward. Figure on obtainting “ten no’s and one yes,” states Millard. “You just have to find believers. Once you obtain one believer, it’s simpler to obtain the second.”
Millard typically offers her believers a two-year convertible note with a 6% interest rate. If the business prospers, the angels can convert their investment into equity at a 20% discount.
A few years ago, after Bobbie Carlton, owner of Carlton PR Marketing, launched her Innovation Nights startup and supported launch over 1,500 products, “an angel investor came to me stateing, ‘Hey, I have invested in six companies that you brought to the table. When are you going to start something I can invest in?'”
In 2015, that person became an angel investor in Carlton’s Innovation Women, providing access to $125,000 in exmodify for a percentage of the business.
“I went to traditional banks and they didn’t want to touch me. And I was inquireing for less than $10,000.”
Advice: If possible, view for frifinishs, family members or angel investors who’ll provide expertise as well as cash. “My investors bring more than capital; they bring a private equity mind, a packaged goods focus and a grocery background,” states Millard.
Bank Loans
Nearly all banks create loans of up to $1 million to tiny businesses, according to the 2024 FDIC Small Business Lfinishing Survey. Small banks, the report states, are somewhat more likely than large banks to lfinish to startups; most loans are local, going to companies within 60 miles of a branch.
Often, banks prefer applicants with strong personal and business credit histories whose companies are at least two years old. “Banks are only interested in historical performance of what they can underwrite against,” states Millard.
Gardner ran into this when she wanted to open a store in New York City in 2018. “I went to traditional banks and they didn’t want to touch me. And I was inquireing for less than $10,000,” she states.
When applying for a bank loan, you may be required to provide a personal guarantee, especially if you’re a solopreneur. This means if you default on the debt, the bank can go after your assets such as your car, home or 401(k) account.
Securing an SBA loan is obtainting tougher. “There were significant modifys to the SBA loan program that went live June 1st and I consider they are going to have large impacts on tiny businesses,” states Frost.
For example, it’s become harder to qualify for SBA loans and all owners must now be American citizens or legal permanent residents.
In addition, the maximum size of SBA 7(a) tiny loans — which offer reduced paperwork — has shrunk from $500,000 to $350,000. Says Frost: “There are now more requirements on the lfinisher, so the lfinisher has to do more work. Some lfinishers will just state, ‘This loan isn’t financially worth it to my bank, so I’m not going to pursue it.'”
“I consider a very good place to start viewing for a bank loan is SBA’s Lfinisher Match,” states Frost. This tool on the SBA site provides a curated list of banks expressing interest in the loan you want. Then, you can compare their rates, terms and fees and apply.
“Get at least one quote from Lfinisher Match, then maybe one from your local community bank and one with whoever you regularly bank with,” states Frost.
Some financial institutions offer loans to particular types of applicants, such as women, minorities or owners hoping to improve their community.
Others work with nonprofits serving these entrepreneurs. For example, WEALF partners with Accompany Capital to offer $10,000, interest-free, three-year loans to women owners in the New York City area; subsequent loans have 3% interest rates. “If you come to us and do well, we’ll give you a second loan,” states Weiner. “Some people have had four loans with us.”
“If your bank doesn’t offer tiny business loans, inquire for a referral becaapply the bank may have a relationship with a lfinishing institution that does.”
Advice: Before applying for a bank loan, prepare the documents lfinishers want — a business plan, income projections, how much you necessary and how the money will support your business.
“If you have a bank with an established relationship, always start there. The vast majority of the time, they will offer you the best rate becaapply they know your finances,” states Frost. “If your bank doesn’t offer tiny business loans, inquire for a referral becaapply the bank may have a relationship with a lfinishing institution that does.”
Fintech and Non-Bank Lfinishers
More than a third of tiny businesses now apply for funding from non-bank financial institutions like Paypal, Stripe and Shopify, according to the Treasury Department. Many are high-risk, low-credit score owners and those from underserved groups.
Typically, these lfinishers provide revenue-based financing, charging fees based on a business’ revenues. “When you do the math, this cost of borrowing is really quite high,” states Brian Pifer, Vice President for Research and Insights at Small Business Majority.
But non-bank loans are often simpler to obtain than bank loans. When Gardner was rejected by banks, she turned to PayPal and received a loan quickly. “PayPal has stuck with me and the size of my loans with them has continued to increase; my most recent one was $30,000,” she states. Gardner has also received fintech loans from Square and Shopify.
“You do have to pay more with a non-traditional bank, but the money’s in your account the next day,” she states.
Advice: You can apply directly to fintech and non-bank lfinishers, but you might consider applying an online lfinishing marketplace that lets you compare offers. Examples: Fundera and Lfinishio.
Grants
Grants are interest-free, cash awards to tiny business owners — typically for $2,000 to $5,000 — from federal and state agencies, companies and organizations.
“Grants can be an incredible way to grow your business becaapply they allow you access to capital without giving up equity or taking on debt,” states Stephanie Cartin, co-founder of The Entreprenista League, a resource for women business owners.
Think of grants as the tiny-business equivalent of college scholarships. While loads of places offer grants, the chance of obtainting one is tiny and the amounts are usually tiny, too.
The competition is fierce. For example, the National Association for the Self-Employed awards roughly 30 grants of $4,000 apiece annually but obtains over 100 applications every quarter.
“Grants can be an incredible way to grow your business becaapply they allow you access to capital without giving up equity or taking on debt.”
Stacy Savage, founder of the 12-year-old Zero Waste Strategies environmental consulting firm in Austin, Texas, has applied for over 40 grants in the past year. “I haven’t received a penny,” she states. “It’s a little disheartening.”
Several other entrepreneurs interviewed for this article struck out applying for grants, too. Even worse, they’ve rarely been notified why their application was denied.
Small Business Development Centers and Minority Business Development Agency centers can notify you about grants and some states offer no-cost financing. There are also grant marketplaces like Skip as well as tarobtained grant programs for women (Amber Grants), women and minorities (Galaxy of Stars) and members of underserved communities or entrepreneurs facing financial challenges hampering their growth (Threadnecessaryle Alley Foundation).
Advice: When applying for a grant, create a compelling case for how the money could support you grow your business. “We don’t like to give a grant for somebody becaapply they just want to pay off credit card debt,” states Hall of the National Association for the Self-Employed.
If you’re rejected for a grant, Hall states, inquire what your application lacked. Learning this can support create you a stronger case when you next apply for a grant.
Support
Whether you’re on the hunt for financing, want answers to questions about starting or running a business or necessary a mentor, numerous sources of support can support:
SCORE This is a free mentoring program around the counattempt offered in conjunction with the Small Business Administration. It offers one-on-one advice as well as webinars. But the Trump administration has proposed slashing SCORE’s federal funding.
Small Business Development Centers (SBDC) These nearly 1,000 local facilities, jointly run by the SBA and educational institutions, advise and support startups and business expansion for free.
The Small Business Administration Although its workforce is shrinking, some offices are closing and the Trump administration wants to shut the agency’s Women’s Business Center, the SBA still offers a ton of advice and information for current and prospective tiny business owners.
Local Chambers of Commerce They let you learn from other entrepreneurs in your area. There may be a fee to join.
The National Association for the Self-Employed Becoming part of this group (cost: $120 annually) gives you access to its experts who answer member questions.
LinkedIn Groups allow you to tap other business owners for advice.
The Tory Burch Foundation, The Entreprenista League, WEALF and other mentoring groups for women. They combine mentoring by women entrepreneurs with financing opportunities. At WEALF, after a woman secures a loan from the group, “we attempt to match her with someone we consider would be a good fit as a mentor,” states Weiner.
Gardner is a member and fan of The Entreprenista League, a vibrant support group of women business owners. “They have a publicity resource, a podcast resource and they really amplify visibility,” she states.
Says Entreprenista’s Cartin: “The key is finding a supportive community that values experience, collaboration and lifelong learning and support.”
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