6 small business funding options

12 February 2014

When you’re first starting out with your small business, it can be a little difficult to qualify for a business loan from your local bank. However, there are other ways to get access to the funds you need to support your business through its initial stages of growth. The following 6 small business funding options are some of the most common at the beginning of your journey.


This is the #1 small business funding option for most people. To the extent small business owners have a nest egg, they will typically use a portion of it before searching for third-party funding.

Tapping into some of your savings is a great way to get started with the clear benefit that it doesn’t have a cost (i.e no interest rate). Of course, the downside is that it is your capital that is at risk and if things go bad its all on you!

Credit cards

Credit cards are the go-to source of funding in the absence of longer tenor debt. According to a 2012 National Federation of Independent Business study in the US, a whopping 79% of small business owners used personal credit cards to start or grow their business.

Larry Page and Sergey Brin used credit cards to fund Google in its infancy and so have many other successful startup businesses. There are of course, also a lot of small businesses that have used credit cards and failed miserably. The credit card option is a good fall-back when no other financing options are readily available. The big downside is that it significantly increases the risk of failure because if you don’t have enough cash flow to meet your monthly credit card payments, things can get ugly very quick – so handle with care.

Family and friends

Do you have a rich uncle? Many startup ventures are funded by friends and family. This is especially true where the entrepreneur has personal experience and a background working in the industry (such as a chef starting his own restaurant) and where the capital cost of the startup is relatively large and not easily able to be financed through other means. If you adopt this route just be sure that your family fully understands the risk in the venture.


There are a large number of Federal and State grant programs available in Australia for startup businesses. These programs are typically reserved for unique business models and may require a degree of technological innovation from what is currently on offer in the market. They are also notoriously difficult to get. To see an overview of the grants on offer check out Australian government grants:

Bank borrowing

Bank financing is (with the exception of grant funding) typically the cheapest form of financing but also one of the most difficult to get. Most banks don’t fund startups but they will lend against property security so if you own property, you can potentially draw capital from this asset to fund your loan.

Non-bank finance

In Australia there are now a number of non-bank debt alternatives for small businesses. Companies like Silverchef provide funding to small business operators that need equipment finance. In addition, there are a number of operators in the invoice discounting and factoring space that provide working capital solutions for more established businesses. These players include Bibby Finance and Scottish Pacific.

And here at GetCapital we provide a range of business finance solutions to help small and medium businesses fund their growth with the right type of business loans to suit their needs (without necessarily requiring property security).


Getting your financing right for your small business is one of the keys to startup success. It’s not just about the cost of the financing. It’s also about getting the right financing partner who will grow with your business. Most entrepreneurs underestimate the funding they require – so think carefully about both the amount and type of funding you need.

And lastly, good luck growing your business!

About Shift

Shift is finance on demand for business. Enabled by streaming data, Shift provides credit and payments platforms that help businesses trade, pay and access funds.  As one of Australia’s fastest-growing technology companies. 

Shift is changing the way businesses access finance. Shift has been recognised by AFR’s Fast 100, Deloitte’s Technology Fast50, Smart Company’s Smart50 and Deloitte’s Asia Pacific Technology Fast 500.