Startup Business Loans: Where to Find Funding in 2019

William Anderson

View Posts

If you operate a startup, it can be hard to find the funding you need to get things off the ground. Lenders tend to avoid startups, as they don’t want to be overexposed to risky borrowers. Many startups end before they turn a profit, so lending to a startup company is one of the riskiest forms of finance for lenders.

Fortunately, there are other types of lending that can help you fund your business if you need money in the initial stages of operation. Business owners have to get creative when they’re trying to find financing – but this doesn’t mean that the process is impossible.

This guide will provide you with multiple funding options you can use to help fund your business. You’ll find there are more financing opportunities than you think. Remember to consider the pros and cons of each option prior to making any commitments.

SBA Loans

SBA loans are backed by the Small Business Administration, via the federal government. They’re provided by traditional lenders, but they’re insured by federal officials. This means that if you end up defaulting on the loan, the federal government will have to pay the lender 85 percent of the loan. This makes it much easier for lenders to provide money to startups.

The government provides this service because they want as much investment as possible into small businesses – it’s good for the economy. Because of the nature of the loan, there are some different requirements than with traditional business loans. You should make sure to be fully aware of what is expected of you prior to making any agreements.

Microloans: Nonprofits

Microloans are small loans provided by nonprofits. They’re normally provided with the intention of helping individuals start certain businesses. There are a variety of different nonprofits or community organizations that provide these loans to business owners. Each will have their own set of requirements that stipulate who can borrow and for what purpose.

There are certain organizations that provide microloans for specific types of borrowers. For example, an organization may offer microloans to women who want to start businesses. Make sure to search around for different types of microloans – you may fit into a specific program or category that allows you to borrow from certain organizations.

This is a great way to start a business if you don’t have a solid credit history. It will provide you with the opportunity to pay back financing over a set term – this will greatly improve your ability to apply for financing from other lenders in the future!


Grants are provided by both federal organizations and private providers. Grants are free money that you can use to help fund your business. In this regard, it is the most affordable type of funding for startups in 2018.

Like microloans, grants are typically given to people that have a certain background. Veterans, women, and minorities all have different grant programs that they can apply for. Finding a grant can be hard work, but it’s definitely worth the effort if you’re able to get free funding.

Startup Business Loans: Where to Find Funding in 2018


While it might not be feasible for everyone, borrowing money from family or friends is an option when you’re starting a business.

Remember, when you borrow money from friends or family, things can turn sour very quickly. You may want to avoid this option if possible.


Crowdfunding is a new way that many people have chosen to start their businesses. If you have a product in mind, you can ask people to purchase the product upfront. Plenty of innovative companies have managed to fund their companies using these methods. You’ll just want to make sure that you have a product people are willing to pay for far in advance.

But selling products in advance isn’t the only way that you can crowdfund. You can also sell equity in your company through crowdfunding as well, which is a great way to raise capital if you have a business that is worth investing in. There are plenty of online sites that take a small commission for connecting you with investors.

Credit Cards

Credit cards are commonly used by new business owners to help fund operations. If you are just starting your business, you won’t be able to get a business credit card. So, most business owners end up having to use personal credit cards to cover these initial costs. If you have a decent credit rating, you may be able to access tens of thousands of dollars through your credit card.

The downside to this are the high interest rates typically attached to personal credit cards. You’ll want to use a low-interest credit card if you have access to one. In addition, it costs extra money to withdraw cash from a credit card – cash advance fees can be extremely high.

Remember, if you’re using a personal credit card, the more of your limit that you spend, the lower your credit rating will be. Make sure that you understand the risks of using personal financial instruments in a risky business environment.

Business Lines of Credit

Business lines of credit are just like credit cards in that you only pay for the money that you use. While interest rates are slightly higher than with other business loans, they’re great for business owners that want flexible financing. In addition, they don’t charge cash advance fees – they’re much better for business owners who need access to cash.

If you need any additional information on business lines of credit, make sure to check out some of the other content on our site!


The type of funding that is best for your business will depend on the type of company that you own. If you have a really good credit score, using a SBA loan is probably your best option – you can work with stable lenders that understand the market. But good credit isn’t a blessing shared by everyone, and therefore some of the other options may be more suitable to people of different financial backgrounds.

Regardless, you need to understand the risks associated with starting a new startup. You should be looking to reduce your personal exposure as much as possible. You don’t want to put your family’s livelihood at risk if you don’t have to. Make sure that you give yourself enough time to consider all your options – rushing into any financial decision is a sure way to end up out of luck.

William Anderson
Senior Business Consultant

William Anderson has been working with small business owners for the past 10 years. He got his start at an investment bank, but felt that he was too detached from where real people were making decisions that affected local economies. As a result, he took his experience and his MBA degree to work helping local small businesses.