Peer-to-Peer Lending

• One unconventional, but viable option to finance your business is through peer-to-peer lending. You can borrow money from ordinary people who set up profiles and commit to loan personal money to others with the promise of a higher than average return on the investment. As a borrower, you create a profile presenting both your personal background and information on the venture you are starting. Your credit is checked on many sites to determine your level of risk for the investor. Investors can search opportunities based on risk.
  
  

Bank Loans

• Banks offer small business loans when you are financially fit and well prepared for the ups and downs of owning a business. To make this determination, loan officers assess your personal finances and business plan. Entrepreneurs with money saved to invest in their businesses have a greater chance at obtaining a small business loan than an entrepreneur seeking 100 percent financing. Rarely do banks offer money to business owners who are not willing to invest in themselves.
  
  

Angel Investors

• The angel investor is a source of funding for small businesses. Unless you have a friend, relative or colleague interested in investing in your business, your hunt for an angel investor can be intense. An angel investor is someone who uses his personal money to invest in a company. Entrepreneurs with a personal network of people seeking alternative ways to reap a hefty return on investment have the best chance of securing financing from angel investors.
  
  

Bootstrapping

• Boot strapping is the process of using your personal money to finance your business. You can do this through credit cards, your 401k, or personal savings accounts. Creativity is required when deciding to finance your own business unless you have enough money saved to cover your operating expenses for several years. Small businesses often do not break even within the first year which could mean you have no option to reinvest the income from the business into the company's expenses. This means you are unable to repay your credit cards or 401k for the borrowed cash.