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5 Effective Ways To Raise Money For A New Business

Raise Money For A New Business

5 Effective Ways To Raise Money For A New Business

You may have a winning business idea, but unless you can arrange for the right amount of funds it most likely will not transform into a successfully scalable venture in the 5 plus years to come. The question is – where do you get the money from? Well, there is always the bank loan; but it’s the hardest to get for a new entrepreneur.

How do you manage to raise money for a new business? Here are 5 of the most effective ways to do it. Remember though, you may have to mix and match all or a few of them to make it work to your advantage.


Self-funding is often the only option for a new entrepreneur, as financial institutions make it difficult for them to get a loan. Liquid assets aren’t the only option though. You can leverage your other assets to raise the necessary money.

It can be anything – downsizing to a smaller home, selling off your luxury car, selling off jewels, and so on. You can also take out a loan against your home, your savings account or even your whole life insurance policy.


While banks will ask for business plans, financial projections, and collateral before they give any loan, you may not have to face any such hurdles when you decide to borrow from your close ones. But it’s easier in theory than in practice.

You may not have to pay any interest (or even if you have to, it’s usually quite low). But make sure you get every detail in writing. And also make sure it is a loan, and you don’t give away a legal stake in your business to everyone.


If you can convince your suppliers to work with you in such a manner that you have a fixed period of time before you need to pay for the supplies, things can work out. It works in the same way for established businesses.

But it isn’t easy. You have to provide suppliers with a good business plan, financial projections, collateral, and any other documents they ask for to make it work. Once you have the agreement in place, you will have a fixed time before you need to pay them.


These are successful entrepreneurs who can help you get your business on track. But remember, it’s not a loan; it’s an equity investment. So, you have to hand over a slice of ownership to them when you get their money.

The advantage is that you don’t need to fret over regular payments or interest rates. But on the downside, you may have to share the authority over your business. And it may be a little difficult at times to ask for approval from every investor.


Certain companies specialize in finding lenders for small businesses. All small business loans can help you find the funds for your new venture. But you need a business plan, financial projections and some money for the startup.

Online lending sites are good places to get loans for your small business too. But they are unsecured loans. And it’s essential that you scrutinize every detail, especially the fine print, of the loan agreement before you sign on the dotted line.

You can also check out the loan programs available from the government to identify possible opportunities to get adequate financing. If you are eligible, it can take out one of the biggest hurdles in creating a successful business – startup costs.

Recommended books with tips on raising money for a new business:

Venture Capital by Elaine and Kaiwen Leong
StartupLand by Mikkel Svane
Everyday Entrepreneurs by Ken Horn
Do Cool Sh*t by Miki Agrawal
The Startup Survival System by Kurt Won

What are some ways you suggest for entrepreneurs raising money for a new business? Share with everyone in the comments below:

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Cody Faldyn

Cody is a blogger, social media specialist, graphic designer, and the Marketing Evangelist behind The Entrepreneurs Library. With a long time passion for personal growth, Cody helped create a website and podcast with the intent to educate aspiring entrepreneurs on the latest and greatest books on business growth and personal development.