Although you can certainly apply for a loan as a small business, you should expect to invest some initial capital in the business yourself because the lender will not cover all your startup costs. In addition, many lenders want to see that you’ve been in business for two years before they will consider loaning you money.

Instead of raising debt capital, you can build capital for your business without a traditional bank loan. While it can be challenging, it’s certainly not impossible. So what are some of the best ways to start building capital for your small business?

Angel Investors or Groups

An angel investor is a private investor who provides capital in the form of their own money to a new business, but for a share of the company. You may also have the opportunity to build capital from angel groups, which are just several angel investors acting as a single entity.

Since your angel investor or group will essentially become part of your business, it’s a good idea for them to have some knowledge about your field and your goals so they can guide you in making the right decisions for your business. Ideally, you would have an angel investor who is well-versed in your industry.


If you have an idea for a business and need to raise capital without strings attached, crowdfunding may be an option.

Crowdfunding generally is most successful for those who already have a lot of connections or a large social media presence in addition to a solid business idea or a moving story that will encourage people to contribute.

A successful crowdfunding campaign can also be an indicator of how much people want to see your idea become a reality. This means the success of your crowdfunding can show you how your business has the potential to grow in the future.

Government-Backed Grants

Your small business may qualify for grants, such as those from the U.S. Small Business Administration (SBA). Although you will need to meet specific requirements to qualify, this is essentially money that you do not have to pay back, making it debt-free capital.

Although counting on a grant may not be the best way to build capital for your business, if you are in a specific industry that qualifies—such as scientific research, non-profit, or an educational organization—these grants may be able to help you.

Fund Your Own Business

It may be possible to use your existing resources to fund your small business—this is called bootstrapping. You can invest some of your savings, use existing lines of credit, or even take advantage of a 0% APR credit card, which would allow you to use the line of credit to fund a startup without having to pay interest on the balance for a certain number of months.

Bootstrapping your business allows you to build capital on your own terms and not owe anyone money after you start generating revenue. While it may not be feasible for every business owner, bootstrapping is a great way to build capital and cultivate the drive to see your business succeed.

Consider Business Consulting

If you’re thinking of starting a new business or expanding your current one, schedule a consultation with Scharf Pera & Co., PLLC, today. We offer new business consulting and financial consulting in Charlotte.