Navigating the financial landscape of running a small business can be daunting, but it doesn’t have to be a journey you do alone. We asked our community of experts about the many financing options available to help entrepreneurs make informed decisions to fuel their business’s growth.
- Choose Secured Loans for Lower Interest
- Finance Through Local Credit Unions
- Opt for a Business Line of Credit
- Bootstrap to Build a Strong Foundation
- Pre-Sell to Fund Development
- Secure SBA Loans for Low-Interest Rates
- Seek Angel Investors for Equity Funding
- Form Partnerships for Resources and Funding
Choose Secured Loans for Lower Interest
After watching countless entrepreneurs navigate the funding maze, I’ve found that nothing beats a simple, yet solid, secured loan for most small businesses. The math simply works better as you’ll pay less interest over time because the lender’s risk is covered by your collateral. It keeps more money in your pocket when you need it most.
The longer repayment windows (typically 5-15 years) create breathing room that alternatives just don’t offer. Your monthly payments stay manageable, letting you actually sleep at night instead of stressing about impossible payment schedules.
What’s particularly valuable is that secured loans remain accessible even with a less-than-perfect credit history. I’ve helped business owners who had been rejected elsewhere get the funding they needed because their collateral shifted the equation.
You’ll maintain complete ownership too. No investors looking over your shoulder or questioning your decisions. The business stays yours, period.
Smart collateral selection makes all the difference. Property usually gets you the best deal, but equipment, vehicles, or receivables can work wonderfully depending on what you’ve got. Just make sure your cash flow projections are realistic before signing anything!
Holly Andrews, Managing Director, KIS Finance
Finance Through Local Credit Unions
In my experience, local credit unions can be one of the most effective and underrated ways to finance a small business. Unlike larger banks that often rely strictly on rigid criteria and algorithms, credit unions tend to take a more personalized, community-driven approach. They’re deeply rooted in the local area, which means they often understand the pulse of the community and the needs of local entrepreneurs in a way that big corporate institutions just can’t replicate.
What sets credit unions apart is that they’re not just looking at numbers on paper, they’re more likely to take the time to sit down with you, hear your story, and understand your vision. That personal connection can make a huge difference when you’re trying to get a small business off the ground. You’re not just another application in a stack, you’re a real person with a purpose, and that human element matters.
On top of that, credit unions often offer more flexible loan terms, lower interest rates, and fewer hidden fees than traditional banks. And because they’re member-owned, their focus is usually more about supporting people rather than maximizing profits. That kind of mission-driven lending aligns naturally with the spirit of entrepreneurship.
So, if you’re starting a small business, I genuinely believe your first stop should be a local credit union. You might be surprised at how much more open and supportive they are compared to the larger, more impersonal financial institutions.
Karen Sampolski, CFO, Viking Roofing
Opt for a Business Line of Credit
I’ve helped tons of small business owners figure out funding, and honestly, it all comes down to your cash flow, how much risk you can stomach, and where you want to take the business. If I had to pick just one option, I’d say a business line of credit works best for most. You get money when you need it without jumping straight into debt. Plus, you only pay interest on what you actually use—keeps costs down while giving you room to handle inventory, make payroll, or deal with those “oh crap” moments every business faces.
For startups, bootstrap if you can—grow using the money you’re actually making instead of borrowing whenever possible. When you do need outside cash, SBA loans give you solid terms and better rates, though you’ll need decent credit and patience with the paperwork mountain. If you’re in one of those high-growth industries, equity financing might make sense but remember—giving away pieces of your company comes with strings attached that never go away.
But the absolute worst move? Leaning on personal credit cards. Those crazy interest rates and quick repayment windows can sink you fast.
Smart financing isn’t rocket science—it just sets you up to stick around long-term. Keep your cash flowing, only borrow when it makes real sense, and stay away from debt traps that eat your profits. Getting the money isn’t the hard part—keeping control of your business is what matters.
Alan Andrews, Commercial Finance Specialist, KIS Finance
Bootstrap to Build a Strong Foundation
In my experience, the best way to finance a small business is through bootstrapping, at least in the initial stages.
I started my first venture with minimal savings, and while it was nerve-wracking, it forced me to be resourceful and deeply strategic about every decision. I vividly recall a moment when I had to choose between upgrading equipment or investing in marketing.
Because the money was my own, I weighed every option carefully, and that discipline shaped my business into one that could stretch every dollar and deliver results.
Bootstrapping also taught me the value of building slowly but sustainably. I remember feeling frustrated about not being able to scale operations as quickly as I wanted, but it pushed me to engage with my customers more personally and refine my offerings.
That direct involvement built loyalty and shaped my brand in ways I couldn’t have anticipated. It was a slower process, but it grounded the business in solid foundations.
For other entrepreneurs, I’d recommend starting small with your own funds if possible. When you’re financing your dream, it sharpens your focus and allows you to retain full control over your vision. Utilize this phase to build a strong, lean model while proving your concept. Investors may come later, but bootstrapping ensures you’re never reliant on external conditions to create something meaningful.
Ben H, Founder & Owner, Dealmemo
Pre-Sell to Fund Development
When I launched, I wanted full control over decisions, so traditional funding was not an option. Instead of taking on debt or selling equity, I turned my customers into my investors by pre-selling access to our platform before it was fully built.
Before we wrote a single line of code, we pitched early adopters on the product vision. The deal was simple: pay upfront for a discounted lifetime membership. Within three months, we collected $140,000. That covered development, legal fees, and early operations without touching loans or venture capital. Customers who bought in became loyal advocates, and the business started with real demand instead of chasing investors. No debt, no diluted ownership, no waiting months for funding approvals.
Most businesses underestimate how much customers are willing to pay early. A strong pitch and a great offer can do more than any investor. If people are not willing to prepay, the idea might need work anyway.
Thomas Franklin, CEO, Swapped
Secure SBA Loans for Low-Interest Rates
One of the most effective ways to finance a small business is through Small Business Administration (SBA) loans because they offer low-interest rates, long repayment terms, and flexible eligibility requirements. Unlike traditional bank loans, SBA loans are partially guaranteed by the government, reducing lender risk and making it easier for small businesses to qualify. These loans are ideal for business expansion, equipment purchases, and working capital needs, allowing entrepreneurs to scale without the burden of excessive debt.
SBA loans stand out due to their favorable repayment terms, often ranging from 7 to 25 years, which help businesses manage cash flow more effectively. Additionally, they typically have lower interest rates than credit cards or alternative lending options. While the application process can be lengthy and require extensive documentation, the long-term benefits outweigh the initial effort. By securing an SBA loan, small business owners can access affordable capital, build financial credibility, and position their businesses for long-term success.
Wes Lewins, Chief Financial Officer, Networth
Seek Angel Investors for Equity Funding
The single best way to finance a small business is to get an angel investor.
This is the best method by far since angel investors, 1) will generally give you equity funding so you don’t need to make monthly interest/principal payments, 2) can help support the business by providing strategic advice and introducing you to people who can help your business (customers, partners, etc.), and 3) typically don’t ask for/require nearly as much equity as a professional investor like a venture capitalist.
Dave Lavinsky, President, PlanPros
Form Partnerships for Resources and Funding
A less conventional but effective financing method is forming partnerships with companies that benefit from your success. Instead of seeking investors who only provide cash, look for partners who can offer both funding and resources—whether it’s distribution, technology, or shared marketing.
This not only reduces startup costs but also provides instant credibility in the market. I’ve seen businesses grow quickly by securing partnerships with established brands that helped with manufacturing or distribution in exchange for exclusivity or revenue-sharing agreements.
Shane McEvoy, MD, Flycast Media
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