How to Raise Capital for Small Businesses Without Getting a Loan


You already know different methods of raising finances for your business. But is there a way without actually taking out a loan?

Yes, there is. When you need financing for your business, there are many ways you can get funds. Before tapping into these sources, you’ll need to figure out how much you need, as that will affect which is the best way to raise money.

When you’re ready, take a look at some of the following resources. Happy fundraising!

Contests and Sweepstakes

This can be a fun way to raise money for your business. Since you’re putting the work into a business plan and find people to fund it, why not try and see if you can win some money in the process?

There are plenty of contests scattered throughout the year, so keep an eye out for when submissions are due. If you missed a deadline, don’t fret. There’s always next year.

Mission Main Street Contest

This content gives grants to 20 business owners $100,000 each year. The application process also includes a social media component

Love Our Local Business

This contest sponsored by Inuit gives money to businesses to help market their business. All yo have to do is write  description about your business and get people to vote for it through social media. You could be one of 15 businesses who win $5,000.

Hatch Pitch

You can pitch your idea for an innovative technology during this event held every year at South by Southwest (SWSW). You have four minutes to pitch to judges. Winners have a chance to receive funding and a chance to be mentored.

Equity Investment

If you don’t want a loan, consider asking people to invest in your business. Now, keep in mind this is still not free money. Investors will give you money and expect a share of the profits.

Most of these investors are accredited investors, which means that these people have a certain net worth and are serious about using their money to make more. That doesn’t mean they don’t invest bits and pieces here and there, so you’re only looking to raise a few thousand, you’re fine.


This is a website that connects businesses with investors and helps them discuss possible deals. You can find and build relationships with investors and discuss whatever you need to. There is an application process and everyone is vetted, so rest assured the investors you talk to are serious about investing in businesses.


All you have to do is create a profile on this website and its administrators will pair you up with investors that look like a good fit and will make an email introduction. Think of this site as a social media platform where you have a profile and an activity feed. To maximize your chances of funding, keep your profile up to date.

Incubators and Accelerators

These programs can be found in most major cities and help nurture businesses. Once approved, you get training and networking opportunities while working on your business. These places want you to succeed, so you’ll most likely get funding and the training you need to succeed.

Make sure you do your research and see which one is a good fit for you:

  • Y Combinator (Mountain View, California)
  • TechStars (Boston, Boulder, New York, San Antonio, Seattle)
  • DreamIt Ventures (New York, Philadelphia)
  • AngelPad (San Francisco)
  • Launchpad LA (Los Angeles)
  • Excelerate Labs (Chicago)
  • Kicklabs (San Francisco)
  • TechNexus (Chicago)
  • Tech Wildcatters (Dallas)

One way to get start up capital that is NOT a recommended is by gambling for it on stock or options markets. There has been a big push recently for binary options, but if historical performance is any guide, folks who rely on active trading to raise business startup capital are likely to lose their shirts. Instead, be smart and go with one of the choices in this article.