How to Raise Money for a Business Without a Loan

I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

Raising money for a business can be difficult, especially if you don't want to take out a loan. However, it's not impossible, as this article will show you seven ways to raise money for a business without a loan.

raise money for a business
Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Read our Advertising Disclosure.

Imagine that you've just started a business. You have a great product or service, a solid business plan, and a passion for your venture. But there's one problem: you don't have any money to get it off the ground and don't want to use a loan.

Don't worry. You're not alone. Many entrepreneurs find themselves in the same position. In fact, according to Finder, in 2020, 42% of all small business owners applied for a business loan at a large bank.

But the good news is that there are ways to raise money for a business without taking out a loan. So what are some other ways to raise money for a business?

7 Ways to Raise Money without a Loan

Why we like StartEngine:

StartEngine allows everyday people to invest and own shares in startups and early growth companies.

>> Read our full review

Service: Equity crowdfunding platform

Minimum Investment: $100

Promotion: Receive up to 20% bonus shares

1. Crowdfunding sites

If you've ever been to a website like Kickstarter or GoFundMe, then you've seen crowdfunding in action. Crowdfunding allows people to pool their money together to support a cause or finance a project.

Crowdfunding sites are online platforms that allow people to solicit donations from a large group of donors. They are typically used for charitable causes or funding creative projects, but they can also be used to raise money for businesses.

Several different crowdfunding sites are available, and each has its own rules and guidelines.  You must create a campaign page to use a crowdfunding site to raise money for your business.

This page will include information about your business and your fundraising goal. You will also need to provide potential donors with a way to donate money to your campaign.

Once you create your campaign page, you must promote it through social media and other channels. If you successfully raise the desired amount of money, you can use the funds to start or grow your business.

2. Small Business Administration (SBA)

The SBA or the Small Business Administration is a Federal agency that supports entrepreneurs and small businesses. The SBA doesn't provide funding directly to businesses, but they do offer several programs and services that can help small businesses get off the ground.

For example, the SBA provides counseling and training programs, loans, and initiatives to help companies grow. They also offer disaster relief assistance for businesses that have been affected by natural disasters.

In addition, the SBA provides information and resources on its website to help small business owners navigate the often-complex world of business ownership.

The SBA is an excellent resource for anyone looking to start or grow a small business.

3. Find angel investors

If you're looking to take your business to the next level, you may be wondering if angel investors are right for you. So, what exactly are angel investors?

They are individuals who provide financial backing for small businesses or startups. They typically receive a portion of the company's equity in exchange for their investment.

Angel investors can be a great source of funding for businesses that are growing quickly and need capital to support their growth.

One of the main benefits of working with angel investors is that they often have a lot of experience in the business world and can provide valuable mentorship and advice.

Additionally, they typically have a network of contacts that can be helpful for your business.  Of course, there are some risks associated with working with angel investors.

For example, you may give up a more significant percentage of ownership in your company than you would if you took out a loan from a bank.

4. Bootstrap

Bootstrapping is an excellent option for entrepreneurs who need extra business money. Essentially, bootstrapping means using your resources to finance your business.

This can include money from savings, investments, or even selling personal possessions.  The advantage of bootstrapping is that it allows you to maintain complete control over your business.

You don't have to give up equity or control to secure funding, and you don't have to worry about repaying loans or interest payments.

Bootstrapping can be a great way to get your business off the ground without incurring too much debt. However, it's important to remember that you'll need to be disciplined with your spending to make bootstrapping work.

Otherwise, you could quickly find yourself in over your head financially. But if you're willing to be frugal and creative, bootstrapping can be an excellent option for funding your business.

5. Venture Capitalists (VCs)

A venture capitalist is an investor who provides capital to a startup in exchange for equity, or an ownership stake, in the company.

Venture capitalists are typically looking for high-growth companies in which they can invest large sums of money and receive a significant return on their investment.

In addition to providing capital, venture capitalists often offer valuable advice and mentorship to startup founders. If you are raising money for your business, partnering with a venture capitalist can be a great way to get the funding you need.

However, remember that venture capitalists will only invest in companies that they believe have the potential to be highly successful. As such, it is vital to have a well-crafted business plan and a strong team before approaching a venture capitalist for funding.

6. Pre-sale your products or services

If you've got a great product or service that you're just dying to get out there, but you don't have the cash to get it started, pre-selling might be the way to go.

Pre-selling is when you sell your products or services before they're even available—you're essentially taking orders in advance. It's a great way to raise money fast because people who believe in your product are willing to pay for it upfront.

Plus, it shows potential investors a market for your product, which can help you get funding down the road.  Of course, pre-selling comes with its own set of challenges.

You need to make sure that you can deliver on your promises, and you need to be able to handle customer service inquiries and issues that come up.

But if you're confident in your product and prepared to deal with any bumps in the road, pre-selling can be a great way to get your business off the ground.

7. Join a business incubator

A business incubator is a program that provides funding and resources for early-stage businesses.  A business incubator aims to help companies grow and succeed by providing access to capital, mentorship, and office space.

Business incubators are often affiliated with universities or research institutions, and they typically have a specific focus, such as tech startups or social enterprises.

Many business incubators offer equity-free funding, meaning they do not take a stake in the businesses they support. Instead, they provide seed money businesses can use to cover expenses like office rent, employee salaries, and marketing costs.

In exchange for this funding, business incubators typically require entrepreneurs to give up a small amount of equity in their companies.

Business incubators usually have a selection process, and only the most promising startups are accepted into their programs. If you're thinking about starting a business, an incubator can be a great way to get your company off the ground.

Next Steps

Several options are available if you're interested in raising money for your business without taking out a loan. You can seek out venture capitalists, pre-sell your products or services, or join a business incubator.

Whichever route you choose, be sure to do your research and put together a solid business plan before approaching potential investors. With a little hard work and determination, you can raise the money you need to get your business up and running.

So, for example, if you're interested in seeking VC funding, you should put together a strong business plan and team before approaching investors.

If you're interested in pre-selling your products or services, you must ensure you can deliver on your promises and handle customer service inquiries.

And if you're interested in joining a business incubator, research the different programs available and see if any are a good fit for your business.


StartEngine allows everyday people to invest and own shares in startups and early growth companies.

StartEngine icon


What does it mean to raise money?

Raising money refers to the process of obtaining capital for a business. You can do this through traditional methods like taking out a loan, issuing equity, or through more creative ways like pre-selling products or services or seeking out venture capitalists.

How can I raise money fast?

There are a few different options for raising money quickly. One option is to pre-sell your products or services. This means selling your products or services before they're even available. 

Another option is to seek out venture capitalists. And finally, you can also try to join a business incubator.

When should I consider raising money?

You should consider raising money when you have a well-founded business plan and are confident in your ability to execute it.

You should also ensure you clearly understand how much money you need and what you'll use it for. And finally, you should only raise money when you're confident you can use it to grow your business and make a profit.

I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

More Posts

You May Also Like

Bookkeeper Launch review


Bookkeeper Launch Review – Is It Worth The Cost?

Empty Nesters


Empty Nesters or Not: How Parents Help Adult Children in 2023

budgeting 101


Budgeting 101: How to Budget Money (10 Steps)

income diversity


Why is Income Diversity Important?