Tips for Self-Funding Your Startup

You’ve got a great idea for a startup company and the energy and knowledge to put your plan in motion, but what about the funding? If you don’t qualify for business loans and your business is one that may fail to attract investors for one reason or another, you may assume that you are out of luck. You might feel like you don’t have access to the kind of money you will need to fund your startup, but if you are creative, you may find that isn’t the case. You might have more resources at hand than you know. In most of these cases, you may need to keep your day job for a while as you build up your business to ensure your basic needs are covered.


Plenty of people have started a company with the savings they have. This comes with a caveat. Think carefully before you dip into emergency savings, and be especially cautious if you have dependents. You don’t want to spend your family’s nest egg on a speculative business venture. However, if you are relatively young and free of responsibilities, this could be a good use of your savings.

Credit Cards

The same caveats apply here as to using savings. Don’t go overboard, and don’t set your family up to go broke. However, plenty of startups have funded themselves using credit cards, and it is possible to do it responsibly. You might see if you can get a business credit card, which is not a bad idea anyway since it keeps your personal and business funds separate. This can also be a good time to accept one of those offers for a card that offers you a 0% interest rate for a certain amount of time. When using either savings or a credit card to self-fund your business, it could be financially wise to decide in advance on a limit to the spending you will do and stick to that limit.

Free Up Cash

If you don’t have savings or credit cards you can use or don’t want to risk using those approaches, you may be able to find places where you can save money that you can then put toward your business. One way to do that might be by refinancing your student loans. You can lower your monthly payments by either getting a lower interest rate or by extending the term of your repayment so that your monthly payments are less. Then, use the money you have saved to put toward your business. By taking a look at your budget, you can then also find other ways to spend less on food, entertainment and miscellaneous purchases.

Friends and Family

It’s not quite the same thing as self-funding, but it’s close. You would not be the first entrepreneur to fund your startup dream with the help of friends and family, but it is important to make certain this does not strain your relationships. To prevent this, it’s wise to consult an attorney and draw up a formal contract that includes repayment terms.

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