Many clients believe that banks are a source of funds for a new business, but this is rarely true. Banks require a good business and credit history, along with collateral for the loan. The following is a list of possible sources of funds for starting new businesses or growing an existing business, as originally mentioned at Dartmouth's Tuck Entrepreneurial Network Conference on April 6, 2002.

Adequate financing is a vital part all successful businesses.  All SCORE clients are advised to seek professional advice from a registered Certified Public Accountant (CPA) and/or a licensed attorney specializing in corporate law and/or finance.  Seacoast Chapter 185 provides a registry of Local Resources which contains information on accountants, lawyers, and other useful business resources.

This list is somewhat arranged in the order of ease of obtaining investments.

  • Personal savings
  • Credit cards
  • Home equity loan
  • Second mortgage
  • Friends and family
  • Sweat equity (ownership interest in lieu of cash compensation)
  • Deferred compensation
  • Government grants (no repayment, but complex and slow)
  • Asset-based loan
  • Asset liquidation (sell cars, boats, homes, etc.) 
  • Factoring of accounts receivable
  • Business loans from banks (secured or unsecured)
  • Institutional investors (identified by your investment banker)
  • Equipment lease financing
  • Pre-paid contracts or deposits
  • Corporate strategic investors
  • Vendor financing 
  • Angel investors
  • Venture capitalists
  • Private placements (common and preferred stock)
  • Corporate bonds
  • Stock-IPO (Initial Public Offering)
  • Secondary Stock Offerings
Financing Sources