49 Creative Ways to Finance a B2B Business


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A B2B business entails serving other businesses rather than end consumers. Starting a B2B company is certainly a great idea. You can use your entrepreneurship to help other businesses grow along with yours. Starting a B2B company, however, is easier said than done. One of the biggest obstacles in running any business is not having adequate supply of money

Whether it’s a product-based business or a B2B company, every startup requires capital for meeting the initial operating expenses until it starts earning revenue. Research and development also require capital. Timely and adequate supply of money is very critical for any business. Unfortunately, most traditional sources of capital often fail to provide all the finance a startup needs.

Fortunately, investors and entrepreneurs are coming up with new and creative ways to finance their B2B business. Though somewhat unorthodox, these business financing resources can keep your business growing.

Here is a list of forty nine creative ways to finance a B2B business:

1. Your Assets


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Using your assets is perhaps the easiest way to finance your new B2B business. These assets may include personal property, cars, boats, jewelry, stocks, bonds, and mutual funds. You can either use these assets as collateral to secure a loan or sell these worldly possessions to raise money. However, make sure to consult a professional, such as a financial advisor, before liquidating any of your assets. Depending on the asset, you will also need to know how it will impact your taxes.

2. Angel Investors


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Angel investors are individuals with a keen interest to invest in small businesses and upcoming startups. They usually provide more favorable terms compared to other professional investors. Most angel investors are former entrepreneurs, who can offer valuable business advice alongside the capital. However, you are going to need a solid business plan to convince an angel investor to finance your startup. Read more on how to attract an angel investor.

3. Friends and Family


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Asking your friends and family members to invest in your business idea is a great way to finance your startup. You can either ask them for a business loan or barter a percentage of your business. However, using friends and family as a source of business financing comes with a cost. You are most likely to ruin a good relationship if your business fails. You should, therefore, spend considerable time educating them about the risks involved in your business.

4. Credit Cards


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Credit cards can effectively maintain your working capital as well as the cash flow. Several small B2B companies use credit cards to pay for office stationery, utility bills, and travel expenses, cash back rewards, and discounts. But, credit cards are directly tied to your credit score. Falling behind on your monthly payments can seriously affect your credit score. Besides, credit cards attract high-interest rates. So, if you choose to use a credit card for procuring start-up capital, make sure you have a plan to pay it back quickly.

5. Bank Loans

A traditional bank loan is a great funding option, but only a handful of entrepreneurs can qualify for one. Getting a bank loan has become difficult lately because of the strict lending standards. But, it is a good funding option for people with a good credit score and substantial collateral. One can get a bank loan against personal property, jewelry, and other financial assets. Fixed interest rates and monthly payments make it easier to plan your business expansion with a certainty.

6. Micro Loans

Microloans are typically short-term loans with low interest rates. They are the best financing options for small B2B business owners and entrepreneurs with low capital requirements. Usually, a microloan can range from $500 to $50,000. Fortunately, microlenders are more than willing to offer loans to those who don’t have a business credit history.

7. Bootstrapping

Starting a new business on a limited budget without the help of professional investors is called bootstrapping. It essentially involves doing anything and everything to provide capital for your business. It is one of the cheapest and reliable ways to ensure positive cash flow for your business. The biggest advantage of bootstrapping is that you have greater control over your business as no third party investment is required.

8. Other SBA Financing

SBA (Small Business Administration) backed loans are a reliable source to fund your B2B business. Commercial lenders provide SBA-backed loans as Small Business Administration is not allowed to disburse funds directly. Your business has to satisfy certain terms and conditions to qualify for such loans. However, SBA loan terms and criteria are less stringent than those for other business financing options.

9. Social Lending

Social lending is a type of alternative business financing. In social lending, you can borrow money from a large number of people who have pooled their personal funds together. There are several social lending companies in America, connecting lenders and borrowers.

10. Trade Credit

It may only be a matter of office supplies and equipment, but your B2B business still needs supplies. You can ask your regular vendors about the possibility of a trade credit. A trade credit allows you to buy your supplies on account paying the supplier at a later date. Usually, vendors don’t extend trade credit to a business without a good credit history. But, it is quite useful for an established business with limited cash flow.

11. Customers


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It may sound surprising, but you can use your customer’s money to finance your business. You can negotiate payment terms with your customers by asking them to make full or part of the payment in advance. You can then use this cash to fund your services. As a matter of fact, it is easier to negotiate payment terms in B2B industry.

12. Online Lending

Online lending has become a lifeline for small businesses. This is the quickest way to get funds for your business. Depending on the type of your loan, you can get funding in 48 hours. You can get a loan even if you have a bad credit score. However, online lending is available only for established businesses. Typically, your business needs to be at least three months old to get such a loan.

13. Product Presales

Startups often try to sell their services or products in a pre-sale. If your product or service is good enough, it can sell well on a pre-sale. You can also offer your customers a discount, encouraging them to buy your product or service. For example, you can offer a customer to provide a particular service at a discounted cost for a specific number of years if they buy it on a pre-sale.

14. Side Business

If you have more than one skill, you can start a side business to fund your startup. Side businesses are often flexible and have low overhead costs. For example, you can work as an independent consultant to fund your B2B startup. You can also consult for cash if your skills are applicable in other non-competing industries. However, splitting your time between the two activities can be quite challenging.

15. Renting Out Your Home

Renting out your home is the simplest way to raise money to finance your business especially if you own a large house. It is not as risky as selling your house or using it as collateral to secure a business loan. But, rent income may not match your funding requirements. Nonetheless, it can help you maintain steady cash flow for your business.

16. Crowdfunding


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Crowdfunding is an alternative form of business financing that is used to raise money from a large number of people. There are thousands of crowdfunding websites offering a variety of online fundraising campaigns in the United States. Platforms such as Kickstarter have helped people raise millions of dollars through crowdfunding.

17. Grants

Several grant programs are available on federal, state, and local levels. Government grants are rarely offered to start a business. In fact, a large chunk of federal and state grants goes to non-profit organizations in the country. However, women entrepreneurs can receive grants for starting a business. You can contact the nearest Women’s Business Center to get information about government grants.

18. Mergers and Acquisitions


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Mergers and acquisitions can help you strengthen your business. Acquiring a competitor’s business can increase your market share instantly. It can also help you diversify your business. Companies often buy their suppliers and save big on the margins that suppliers used to add on the costs.

19. Line of Credit


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The line of credit is similar to a business credit card but a lot cheaper. Usually, a financial institution such as a bank offers a line of credit to a commercial organization. Borrowers can use the line of credit to raise money anytime they want. However, they have to return the money within the agreed-upon time limit. Interest is charged only on the amount borrowed. Businesses with a good credit score can easily get a line of credit.

20. Home Equity Loan

If you are looking for a way to fund your startup, you can tap into your home equity. Home equity financing can be set up as a loan or a line of credit. Usually, you can borrow up to 85% of the equity in your home. However, borrowers still have to pay their mortgage. The lender can foreclose on your home if you fall behind on the home equity loan payments.

21. Winning a Contest

If you have the perfect pitch, just enter a startup competition. Winning a contest or a startup competition is a great way to fund your business idea. Entering a competition can also help you test your entrepreneur skills and get some media coverage. You have to either develop a new product or prepare a good business plan to participate in such competitions.

22. Personal Savings

First-time entrepreneurs often find it difficult to get seed money without showing a track record of revenue. If you invest some of your personal savings in your startup, it may encourage professional investors to fund your business in future. The biggest advantage of using personal savings to fund your business is that you don’t have to give up any equity or control. Plus, you are free to grow organically.

23. Factoring Invoices

Invoice factoring is a simple and quick way to for companies to improve their cash flow. Commercial organizations can sell their unpaid invoices to an invoice factoring company at a discount for cash. However, this is an expensive way to raise funds as these companies often charge higher interest rates than conventional lenders.

24. Financing Purchase Orders

Purchase order financing is used to get an advance from a lender against the purchase orders obtained by a business. Purchase order financing is specifically designed for growing businesses that want to fulfill large orders, but have little or no working capital to do so. Companies with a good track record may find it easier to obtain this type of financing. However, startups can also receive funding for their first transactions.

25. Business Loans


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A business loan is strictly intended for business purposes. Most financial institutions, including traditional banks, offer a variety of business loans. Startups can use business loans to pay for salaries and wages until their revenue kicks in. You can also use it for buying office supplies, inventories, and raw materials.

26. Insurance Policies

Personal insurance policies can be used as collateral to secure a business loan. The policy in question should be in the name of the borrower. Plus, it shouldn’t lapse during the term of the loan. So, the borrower can’t fall behind on premiums. Due to the guarantee of funds, lenders readily accept insurance policies as collateral.

27. Employees Stock Ownership Plans

Employee stock ownership plan (ESOP) is a tax-favored business financing alternative. Commercial organizations with ESOP can raise money by selling the company stock directly to the employees. It can be used to expand your business, pay off existing debts and purchase inventories. Lenders view companies with ESOPs in place as a better credit risk, making it easier to secure business loans.

28. Small Business Lending Fund

The Small Business Lending Fund (SBLF) is designed to provide capital to community banks to promote small business lending on local levels. The U.S. Department of Treasury has invested more than $4.0 billion dollars in 332 financial intuitions nationwide through this program. Entrepreneurs can contact the nearest participating bank to get more information about the program.

29. Economic Development Agencies

State and local economic development agencies (EDA) provide financial and technical assistance to local startups and entrepreneurs. They can offer a variety of services including assistance for grants, and business loans, tax planning, employee training, market research, and analysis. Click here to visit your state’s economic development agency.

30. Government Small Business Grants

The federal government doesn’t provide grants to commercial and for-profit organizations. However, it does provide grants to small businesses involved in scientific research and development. You can directly apply for a federal grant on the grants portal. Grants are also available on state and local levels. You can contact your state’s economic development agency for more details.

31. Peer-to-Peer Lending

Peer-to-peer lending or P2P lending is an alternative business financing method that allows entrepreneurs to borrow money without the need of a traditional financial intermediary such as a bank. Peer-to-peer lending is a much cheaper and quicker way to raise seed money for your startup. Most P2P lending companies operate through websites and have a simple online application process.

32. Business Incubation

Business incubation is a process designed to assist startups and new businesses in growing and expanding. Business incubators often have the potential capital to invest or links to potential capital sources. They are usually private organizations that can offer several advantages such as mentorship, expertise, and networking.

33. 401(k) Financing


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401(k) is a tried-and-tested business financing method that has helped many entrepreneurs and small business owners. You can use your retirement fund to finance your businesses through an arrangement called Rollovers for Business Startups (ROBS). The 401(k) financing process is a bit complex. It is, therefore, recommended to hire a tax attorney to set up a C corporation and roll over your assets into it.

34. Vendor Financing

Borrowing money from your vendors is called vendor financing. You can either borrow the money as a loan or offer the vendor a percentage of equity in your company. Vendors can increase their sales and earn interest on the loan by financing their customers. But, vendor financing comes with several risks. Usually, companies facing financial problems use this method as the last resort to maintain their cash flow.

35. Bank Overdrafts

Overdraft financing is one of the oldest forms of business financing. Overdrafts are meant to cover only short-term liquidity requirements. Depending on the amount of overdraft the bank may ask you to provide security or collateral. The borrower can’t exceed the limit set by the lending authority. However, most banks are known to be flexible about overdraft facilities, especially if you have a long-standing business relationship with your bank.

36. Community Schemes

There are plenty of public and private community schemes designed to assist startups with financing, technical assistance and business strategies. Startup America is one such notable initiative launched by the federal government. It aims to expand access to seed capital along with a variety of other benefits for emerging startups nationwide. You can contact your local community center to know about such schemes in your area.

37. Convertible Debt Instruments

Convertible debt instruments have the reliability of a debt instrument. Plus, they offer the potential benefits of a company stock. As a result, these are quite popular among the professional investors. Besides, issuing a convertible debt instrument is a great way to raise capital without having to issue surplus common shares.

38. Franchise Financing


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Securing finance for a franchise business is relatively easy. Most franchisors in America offer in-house financing facilities. Usually, franchisors offer flexible repayment options, making it easier to secure a loan. Plus, franchisors listed on the SBA’s Franchise Registry offer several advantages to their franchisees looking for SBA-backed loans.

39. Chamber of Commerce

An emerging startup can benefit from a host of resources provided by the US Chamber of Commerce. It is the sponsor and partner of the Young Entrepreneurs Academy (YEA), an afterschool program specifically designed to assist young entrepreneurs. The program also offers startup funds for young entrepreneurs. Plus, it can connect you to the vast network of entrepreneurs, mentors, investors and other professionals.

40. Convertible Note


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A convertible note is a type of the convertible debt instrument. Angel investors often use convertible notes to invest in a startup. Convertible notes are usually structured as loans at the time of investment. At a later date, when equity investors start funding the company, the outstanding balance of the loan is automatically converted into equity.

41. Investment Crowdfunding

Investment crowdfunding or crowdinvesting is simply equity-based crowdfunding. Unlike crowdfunding, crowdinvesting enables investors to buy equity in the company they are investing. This means you have to sell the shares of your company to a large crowd in exchange for the funding.

42. Revenue-Based Loans

Revenue-based loans work by having borrowers pay a fixed percentage of their revenue to repay the loan. As there is no fixed monthly payment, paying back the loan becomes easier for an upcoming startup. Usually, there is a repayment cap of 4 to 5 years. These loans are usually more expensive than traditional bank loans. However, they don’t require collateral or security.

43. Monthly Recurring Revenue (MRR) Line

Monthly recurring revenue (MRR) is the income a business can anticipate every month. In the recent years, financial institutions have started lending funds based on the MRR of a business. The best feature of an MRR-based line of credit is that it grows with your business and helps to maintain a positive cash flow.

44. Floating the Company or Going Public

Going public is the process of selling a percentage of shares of a company for the first time through an initial public offering (IPO). This sale of stock is also known as floating the company. Going public strengthens the capital base of your company, making it easier to expand your business. It also improves your company’s debt-to-equity ratio, enabling your company to borrow on better terms in future.

45. Individual Partners

Asking your business partners to pool their individual savings is one of the primary sources for funding a startup. This way you don’t have to solicit an unwilling friend or family member to finance your business idea. Depending on the circumstances, your partners can contribute an equal amount of their savings or a percentage of the funds required for the startup.

46. Pension Funds

Pensions funds are a pool of funds set aside for workers to generate income for them after their retirement. However, pension funds usually invest in commercial organizations listed on the stock exchange. Individuals can also tap into their retirement money to finance a new business. However, in most cases, the money in a pension fund is invested on behalf of the employees to generate retirement income.

47. Strategic Alliances

A strategic alliance is an excellent tool to access technology, assets, finances, and knowledge. It enables complementary companies and commercial organizations to pool their resources to work towards a common goal. In a strategic alliance, each company maintains its autonomy while exploring new opportunities.

48. Institutional Term Lenders

Institutional term lenders or institutional investors are large organizations that invest money in public and private companies on behalf of their members. They may include endowment funds, commercial banks, insurance companies, mutual funds, and hedge funds. However, institutional term lenders usually invest in startups that are going public.

49. Credit Unions

Credit unions are non-profit financial institutions owned by their customers. Credit union loans are typically cheaper than bank loans. However, most credit unions tend to provide financial services only to their members. So, you may have to become a member to get a loan from a credit union. Credit union loans are easier to obtain due to their flexible lending approach.


Finding a viable funding solution that suits your requirements is the key to running a successful B2B business. But, finding the right type of business financing is no cakewalk. Fortunately, there are several unorthodox ways to fund your business. Hopefully, one of these 49 creative ways to finance a B2B business will turn out to be the right one for you.