How to start and fund your own business | USAGov (2024)

FAQs

How can I fund a startup with no money? ›

Funding your small business

There are no federal grants for starting a business. But small business owners can get money in different ways. This includes using personal funds, finding investors, or taking out loans.

Fund your business yourself with self-funding

With self-funding, you retain complete control over the business, but you also take on all the risk yourself. Be careful not to spend more than you can afford, and be especially careful if you choose to tap into retirement accounts early.

Despite startup business owners often using alternative funding, it's still possible to find multiple business loans that would serve your needs without having to dip into other sources like personal funds. Here's a rundown of the different types of startup business loans you can apply for.

Microloans. Microloans are loans of up to $50,000 that can help startups tackle small funding needs. Because they are geared toward startup businesses, they may not have revenue requirements to apply. Microloans are available from the SBA, as well as other government, nonprofit and peer-to-peer agencies.

LLC members can tap into their own personal assets to fund their company. This can take different forms, such as investing savings, using personal assets as collateral for a loan, or liquidating assets and putting the proceeds into the LLC.

Yes, you can (and should) charge interest on a loan to your LLC. When loaning money to your own company, it's best to draw up a formal loan agreement and have an attorney review it. You should charge an interest rate that's in line with market rates and come up with reasonable loan terms.

That's called an owner's draw. You can simply write yourself a check or transfer the money for your business profits from your LLC's business bank account to your personal bank account. Easy as that!

Business loans help you expand operations, cover payroll, pay for supplies, and manage cash flow. When you have poor or bad credit, finding a lender can be difficult, but there are many loan options available with credit scores as low as 500.

Do banks give loans to startups? ›

Not all lenders provide startup loans. You may not have much success with traditional lenders like banks and credit unions, though a few work with new businesses. New business owners who need startup funding have options. However, startups don't always qualify for the maximum amount offered by lenders.

Bank Term Loans

You might be able to borrow $1 million or more, though you'll need strong business finances to qualify for a large amount. While big banks can offer large business loans, small community banks might have lower loan amounts.

Starting a new life can be a great opportunity to make refreshing choices and decisions. However, doing so with no money can present a bit of a challenge as well. To make the most of your new life, start by creating a list of goals and keeping a positive mindset. Learn more about saving and your spending habits.

You can apply for a loan with: Banks: These are a good option if you have collateral, good credit and don't need cash immediately. Nonprofit microlenders: If you can't get a loan from the bank because your startup or company is too small, you can seek out smaller lenders to help.