Where to get money for small business development: TOP 7 safe ways

Creating and further developing a business is almost impossible without investment: an entrepreneur needs to start looking for funds at the planning stage. There are several solutions available for obtaining funding sources and methods for growing your own business from scratch without solid start-up capital. We tell you where to look for funds and how to prevent falling into a debt hole.

Where to start looking for money and how to avoid dangerous schemes

At first, it is necessary to draw up a business plan, without which it will be difficult to plan expenses, it is impossible to get a loan or attract investors. It is recommended to describe all items of expenditure and determine the predicted payback and risks that can slow down the process of reaching net profit. To avoid force majeure and the accumulation of debts, you should not resort to the following methods:

  • receive loans from individuals at a high-interest rate for a short period of time with vague conditions;
  • apply to microfinance organizations: they set huge interest rates with a minimum debt repayment period. In case of delay, they can resell the debt to collectors who will annoy with calls not only to the debtor but also to his relatives and colleagues.

You need to carefully weigh the pros and cons of taking money secured by real estate or a car: the most successful business idea can fail at the start, in which case the entrepreneur will be left with nothing. It is better to choose safer options with minimal risks: consider the TOP-7 promising ones.

Where to look for funds for business development

Method number 1. Bank loan

Applying to a bank is the first option of interest to a small business owner. You don’t need much money to start and grow your own business. For example, creating an order pickup point or an online store on the sales e-commerce platform will cost an average of 150-200 thousand rubles (including advertising, staff and other expenses). About 10% should be added to the projected amount (you should not plan finances back to back): within 10-15 months, the entrepreneur will be able to close debt obligations.

In 2022, there are a large number of government programs and measures aimed at supporting small and medium-sized businesses: it will be easy to choose the right one with low-interest rates. In addition, Russian banks constantly offer credit offers with favorable conditions. Sberbank provides loans in the amount of 100 thousand to 200 million rubles for a period of 1-180 months at 12.5-16% per annum (depending on the goals, type of business, and loan). Similar offers can be found in other financial and credit organizations, this method has a number of advantages:

  • quick verification and response to the request, especially if there is a sound business plan;
  • a wide range of loan products that are constantly updated;
  • in case of financial problems with the bank, you can always agree on a delay, in extreme cases, refinancing is available.

However, if the business is not successful, the entrepreneur will be left alone with a large debt. If the business plan indicates a high risk of non-repayment or the entrepreneur has a bad credit history, then the chances of approval of the application are close to zero. A loan will be a good solution only if you do not have to send all the proceeds to repay the principal and interest. Individual entrepreneurs, self-employed and limited liability companies can get a loan.

Method number 2. Attracting an investor

The synergy of a promising business idea and finances can turn into a profitable project, it remains only to find an investor. Attracting a private investor is associated with obtaining finance for the development of the project, each stage of which is recorded in the business plan. This format implies the registration of a limited liability company or the conclusion of an agreement, the terms of which ensure the protection of the rights and obligations of all participants. To find investors, you can use the following recommendations:

  • visiting thematic exhibitions and seminars;
  • project presentation on startup platforms;
  • networks of business angels, which allow not only to find a source of financing but also to receive tips on the management and development of the project, which prevents the dominant number of errors. For Russian entrepreneurs, the national network “Private Capital” and other non-profit organizations are available;
  • business incubators and accelerators focused primarily on supporting young entrepreneurs.

The conditions for receiving funds and support depend on the type of investor, as well as on their requirements. It is worth preparing for the fact that investors will check the entrepreneur, so the absence of outstanding loans, problems with the law and a negative reputation is important.

Method number 3. Borrow from friends

Borrowing funds from relatives or close people is the best solution for entrepreneurs who have been denied a loan at the bank and cannot launch a collection as part of startup support. Among the advantages, it is worth highlighting the absence of interest rates, as well as flexible terms: you can give a loan to friends in parts, if you need a deferment, it will be easier to get it when compared with the banking sector. One person may not have the amount needed to start a business, so it is often necessary to turn to several friends. Debt obligations may be secured by verbal agreements or a notarized receipt that protects the rights of the person providing funds and regulates the obligations of the borrower.

Method number 4. Conducting fundraising activities

Entrepreneurs have the opportunity to work in niches that do not require start-up investments or require minimal injections. This approach allows you to accumulate money that will be used to promote and scale the business. The following should be considered as priorities:

  • dropship model. To start, an entrepreneur will only need a platform for sales: an online store website, a group on a social network, or a messenger. He will act as an intermediary: he will conclude agreements with the manufacturer, put up his goods and begin to accept orders, as well as payments. The cost of production includes the drop shipper’s markup, which is his profit. Logistics processes will be provided by the manufacturer: he will collect, pack and send orders;
  • work on marketplaces and trading platforms. You can enter the marketplace with low-budget goods or hand-made products;
  • provision of services. You can do cleaning, consulting in the area in which the entrepreneur is an expert, or choose another area.

This method allows you not to take on credit obligations and not depend on the requirements of investors, however, the process of accumulating funds can be delayed for at least a year. The risks are minimal: if the business does not pay off or does not work, then everything can be started anew, but with a different idea.

Method number 5. Crowdfunding

The crowdfunding method is a promising solution for business projects of practical, social or other value. The bottom line is that platform participants combine their financial efforts, directing them to support the project they like. Financial and other initiatives are voluntary, the collection is carried out via the Internet. There are several variations of this model, implemented under different conditions:

  • crowdinvesting: professional investors are attracted, who will receive the securities of the newly created company;
  • crowdlending, in which funds are provided urgently for a short time, but for an existing business for development, scaling;
  • guaranteed provision of non-financial rewards. Investors receive certain privileges from the author of the project, for example, a fixed number of services, the first copy of a book or board game translated into Russian;
  • charitable collections, but they are held for social projects and do not involve the receipt of remuneration by investors.

Interaction between business and users is carried out through special investment platforms: they are included in the register of the Central Bank of Russia. If there is no platform in the database, then it is better to refuse cooperation. To start collecting, you need:

  • form the concept of the future project;
  • set goals and carry out business planning;
  • select a site from the register, then find reviews about it, information about the period of work, closed fees and other information indicating reliability;
  • get acquainted with the terms of cooperation: what documents you need to provide, what type of fees are charged, what percentage the site charges for services, the presence of hidden fees;
  • draw up an investment proposal: specify your obligations, describe goals, indicate the terms and amount (minimum and maximum, after reaching which the collection will stop), others.

After the launch of the collection, the investment agreement will be concluded automatically between the author of the project and the users who provide financial assistance. The audience of the platforms is active and loves fresh ideas, but it can take a long time to raise funds to open a standard business (an online clothing store or a beauty salon). Before the start, it is recommended to study the legislative norms regarding crowdfunding and the rules of interaction between platform participants.

Method number 6. Search for a business partner

Attracting a business partner should not be confused with investing. In this format, all costs are divided into two or more parts, depending on the number of partners. All participants have equal rights and obligations, it is possible that everyone is responsible for their part of the work: the first is looking for suppliers, the second is in charge of marketing, and the third analyzes the available investment flows. Cooperation with partners implies the creation of a business in the form of a limited liability company, which equalizes the rights of the founders, and allows you to fairly share the proceeds and sell the business if necessary. Among the advantages of opening a joint business, it is worth highlighting:

  • joint and several liabilities;
  • even distribution of financial injections, cooperation in the format “we use what we have” is possible. For example, one of the co-founders has a workshop, the second has the equipment, and the third has funds for the purchase of industrial raw materials: by joining forces, they will create a profitable business;
  • the opportunity to sell the business at any time, in which case all founders will receive equal shares or those that correspond to the volume of injections into the promotion (negotiated before the launch of the project).

Of the minuses, it is worth highlighting possible conflicts between partners who have a different vision for the development of the project, and situations in which the founder will urgently demand to sell the business or want to withdraw his money from it. You can start searching for partners in social networks, on bulletin boards, and on special sites, for example, PartnerSearch.RU and similar ones.

Method number 7. Fundraising

Fundraising is social and commercial, the latter is of interest to the entrepreneur. It has similarities with crowdfunding, but these concepts should not be confused. Crowdfunding provides quick collective fundraising that investors do not need to return in a “clean form”.

Fundraising is associated with the involvement of an intermediary who searches for investors, discusses the details, and assists in the implementation of the transaction. He can look for specialists, and equipment and solve other issues, but the main direction is investments. Provides formation of the company’s needs and observance of the interests of sponsors, interacts with investors, and forms a favorable reputation.

The intermediary is looking for different investors, which can be individuals and legal entities, foundations, donors, philanthropists, and other organizations, depending on the type of project. For his participation, he receives a percentage of the transaction or a share in the business – this part is negotiated at the beginning of cooperation. Among the advantages, it is worth highlighting stable funding, a positive image, a clear action plan, and fixed obligations of all parties. The search for a fundraiser begins with the formation of an idea, planning, and testing a potential intermediary. Investors are most willing to direct funds to social, technological, and cultural projects.


There are many ways available to help raise funds for business development: the differences lie in the terms, conditions, and legal form requirements. For non-standard projects that are of value to society, it is worth using crowdfunding or fundraising, which ensures that money is received in a relatively short time. If you plan to open a production facility, a catering point, or an online store, then it is better to pay attention to bank loan products, get a loan from friends or niches that do not require solid injections and make it possible to develop the project at the expense of net profit.

Investing and attracting partners is a good solution for global projects and entrepreneurs who are not afraid of collective responsibility and are ready to share the business with other people. When choosing a method, it is important to estimate in advance how much money will need to be returned and what the monthly payment will be. Ideally, the amount should be no more than 20-30% of net revenue (after promotion), otherwise, the business is considered unprofitable: the entrepreneur will send funds to pay off the debt, without having opportunities for product development, expansion, and marketing.

Leave a Comment