How to Get Funding for Business Owners

Building a successful business isn’t only about offering unique products but also the capital for initial investment. It may be needed for renting office space and purchasing web hosting for creating a website.

In fact, lack of capital can lead to startup failure, as 38% of new businesses have failed since 2018 because they couldn’t raise money or ran out of cash. 

We have compiled eight funding options in this article, ranging from using your own assets to relying on external parties. Knowing available options will help you pick the right funding based on your business size, age, and goals. 

1. Bootstrapping

Bootstrapping means gathering personal funds and assets to build a business. Over 80% of startup founders use this type of funding for starting operations. 

With bootstrap funding, business owners have no pressure from investors to get the business right the first time. 

However, it’s essential to set aside enough living expenses for at least a year if you use this option. It’s because most earnings in the first year are usually used for paying for operating expenses and reinvestment. 

Also, if you want to scale quickly, it’s better to seek external financing. Usually, investors will not only back up your finance but also give advice and higher visibility for your business using their networking connections.

2. Bank Loan

If your business starts making a profit, you may be able to qualify for a bank loan. Each bank usually lends a different amount of money according to your startups’ conditions, but it’s possible to get $5,000 to $500,000 with 2.5 to 7% interest rates on average

Consider choosing your personal bank because it’s already familiar with your banking history. An alternative is going to a bank that’s known for lending to small businesses. 

3. Venture Capital

For businesses that need significant funding, venture capital (VC) can be a great option. VC firms get the investment capital from financial institutions, investment banks, and wealthy investors to finance startup companies or small businesses. 

VC typically looks for quite established businesses with unique ideas and the potential to bring a lot of money. It will investigate the company’s products, business models, and management.  

Several of the most famous venture capitalists in India are Helion Ventures and Kalaari Capital. In Pakistan, some VC options include the Central Depository Company of Pakistan and Arazi Ventures

4. Angel Investment

Compared to VC, angel investment is easier to get for startups at earlier stages. Angel investors use their own money, so it’s up to them to choose a business they want to finance. The downside is that they may not invest as much as VC firms do. 

To impress angel investors, create a complete and convincing business plan that covers everything from the target market to financial projections and marketing plans. 

Some popular angel investment sites in India include Mumbai Angels and Indian Angel Network. Go to The Pakistan Investment Network if you’re a Pakistanis business owner.

5. Government Programs

Unlike loans and VC, many government funding programs don’t require you to pay the money back. 

However, finding a suitable government program for your business can require some research. That’s because some programs only aim at particular areas, sectors, or business owners, like womenpreneurs and veterans. 

Some government programs for business owners in India are Pradhan Mantri Mudra Yojana and Credit Guarantee Trust Fund for Micro & Small Enterprises (CGT SME)

6. Crowdfunding

Crowdfunding is an excellent choice if you look for a microloan or your business works for social good. This funding option involves asking large groups of people to fund your business through a website. 

Here, you need to write a detailed description of your business, how much you need, and for what purpose. If people like your idea, they’ll help you by pre-buying your product or giving a donation. 

Ketto and Catapooolt are two of the most popular crowdfunding in India. Meanwhile, crowdfunding platforms in Pakistan include Seedout and Transparent Hands

7. Business Incubators and Accelerators

For early-stage and upcoming businesses, consider joining business incubator and accelerator programs. These generally run for three to eight months and provide funding opportunities as well as coaching sessions. 

The main differences between incubators and accelerators are their purposes and structures. 

Accelerators are usually major companies that aim to scale up small businesses with a clear time frame. Meanwhile, incubators are often individuals that have connections to VC firms and universities. Incubators also tend to create co-creation environments rather than a structured program like accelerators. 

TLabs and Startup Village are famous incubator and accelerator programs in India. In Pakistan, you can find Plan9 and i2i

8. Funding from Non-Banking Providers

A Non-Banking Financial Company (NBFC) is an alternative to a bank loan. It targets small businesses that lack access to traditional banking, particularly in rural areas. NBFC also provides banking services for companies that don’t hold a bank license. 

Examples of NBFCs are Bajaj Finance Limited and Power Finance Corporation Limited

India and Pakistan also have microfinance institutions (MFIs) that help underprivileged entrepreneurs. These include geographically isolated and socially marginalized business owners. 

MFI institutions in India include Bandhan and Microcredit Foundation of India, while an MFI in Pakistan is Kashf Foundation


Having a successful business often means preparing capital for initial investment. No proper investment means lower chances of your business’s success, so figuring out a way to finance your startup is crucial.

In this article, we have covered eight funding options for small businesses:

  • Bootstrapping. Best for individuals with ample existing assets. 
  • Bank loan. Best for businesses that start making profits. 
  • Venture capital. Best for unique startups needing a lot of money. 
  • Angel investment. Best for businesses at early stages. 
  • Government programs. Best for companies in specific industries.  
  • Crowdfunding. Best for enterprises focussing on social good. 
  • Business incubators and accelerators. Best for business owners needing mentors. 

Hopefully, this article helps you find the best funding for your business. Good luck!