Getting Money for Your Business, Sources:

Friends and family. If you’ll go this route, be clear about the terms and put everything in writing, so no bad blood arises.

Banks and credit unions. Banks are not always easy to crack when it comes to small business lending. It goes without saying that you’ll need a firm business plan and a squeaky-clean credit record to get approved. Your first stop should be a bank that’s familiar with you or your industry, or one that’s known for having a soft spot for small-business lending.

It’s a good idea to seek out one that offers Small Business Administration guaranteed loans. check the “Local Resources” page on the agency’s website (Sba.gov). SBA-guaranteed bank loans tend to demand a lower down payment, and monthly payments may be more manageable. That said, a lender will probably want you to show that you have some skin in the game, too. That means you must be able to show that you have capital or equity that you’re prepared to invest into the business.

Angel investors and venture capital firms. Getting financing from them can be a high-wire dance. But if you can do a little soft-shoe and have a great idea and terrific business plan, these types of investors will back you in exchange for equity or partial ownership. If this route interests you, check out the SBA’s Small Business Investment Company Program.

Economic development programs. There are a range of development loan programs out there, but finding one you can tap might take a little sleuthing and you may need special certification to qualify. For example, if you’re a woman, you might consider getting your firm certified as a woman-owned business. If you’re the principal owner and from a minority group or are located in an economically disadvantaged region, you might qualify for a special loan as well.  The SBA’s economic development department resources can help you decide if this might be an avenue for you. If you’re a veteran, the Department of Veterans Affairs can provide you with information on how to get certified.

Grants. Go to Grants.gov for information on more than 1,000 federal grant programs. Female entrepreneurs may want to connect with one of the SBA’s Women’s Business Centers around the country. These centers provide state, local and private grant information to women interested in going into business for themselves with a nonprofit or for-profit organization.

Crowdfunding and crowdlending sites. These virtual fund-raising campaigns generally raise small sums, but you never know, the money can add up.

Rollovers as Business Startups (ROBS). Here, you use your 401(k), Individual Retirement Account or other retirement funds to finance a business without incurring taxes or Internal Revenue Service penalties. The account gets rolled over into a new retirement fund that, effectively, becomes a shareholder in your business.

Home equity loans. If you have substantial equity built up in your house and a credit score well above 700, this route may be a pretty good option. The funds are usually taken as a lump sum that you can pay off over time. And interest is not sky high, roughly 4% right now.

Credit cards. Using plastic is certainly easy, but it’s a risky choice. Most cards have double-digit interest rates on balances that roll over month to month. That’s a pretty high bar to saddle a new company with in its early days.