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Finish the Race: Top 10 Brilliant Ways to Jump the Startup Funding Hurdle

Reviewed by Ty Crandall

November 13, 2023


Startup Funding Credit Suite

Clear the Startup Funding Hurdle with One of these Excellent Options 

Despite the fact that there are many, many ways to get startup funding, it is still one of the greatest hurdles in the business ownership race. Truly, it is the first hurdle and the one that trips many up before they even get a chance to start.

The key is to find the initial funding that works for you, use it to its fullest ability, and build on it to gain access to other types of funding. For example, if you have a great credit score, you may be able to obtain a small business loan right at the start. Your funding hurdle is a little shorter and easier to clear than some others.

If you do not have awesome credit and a small business loan is not going to happen right away, you have some work to do. You have to be more creative. This is where some of the other startup funding options come in. You need to understand each one, including small business loans, before you can fly high and make it over that hurdle without a bruise.

Of course, there is a constant force working against all hurdle jumpers. That would be gravity. It is a common misconception that the gravity is a force that pulls you down. In truth, an object’s gravitational pull draws other objects toward itself. This means the gravitational pull of the earth pulls us and other object toward it. That is why we hit the ground and stay there. It is all due to gravity.

Each source of startup funding has its own gravitational pull that tries to keep you from using it to clear the hurdle. We will examine each source and its gravitational pull as we go.

Small Business Loans: The First Instinct for Startup Funds

This is the startup funding source that most people immediately look to when they get ready to jump. They get a running start, have beautiful form with a stellar business plan, and then fall flat on their face busting their shins on the way down.

There is more than one place to get a business loan however, and some people do not realize that.

Banks and Credit Unions

This is the traditional option for where to start with business loans. They do typically offer the best terms and rates, but only if your credit is up to par. If your personal credit is not over a certain point, this option is not available to you.

SBA loans

These loans are still offered through traditional lenders such as banks and credit unions, but the federal government guarantees them. Since they are not completely reliant on the credit score of the borrower to reduce risk, the required credit score is slightly lower to qualify.

There is a lot of red tape related to applying for SBA loans however, and it does take a significant amount of time. If you do not qualify for traditional loans and do qualify for SBA loans however, it is definitely worth the time it takes.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

Alternative Lenders

These are lenders that, as a general rule, operate online. Most of the time borrowers can apply online or over the phone and know about approval within minutes. Funds usually only take 24 to 48 hours to hit their account. Though this timeline does vary among lenders, the point is the process is fast and easy.

They also will sometimes take other factors into consideration if the credit score isn’t fabulous. Length of time in business and annual revenue can play a role as well. This makes it a more accessible source of funding for startups than traditional lenders for many. In addition, repayment terms are often more flexible and manageable.

Gravitational Pull

What is the gravitational pull for business loans? The strongest is the high credit score requirement. One simply must already have good credit to qualify. If you are able to overcome this force with the alternative lenders, there is another force to reckon with.

Alternative lenders usually have a higher interest rate than that traditional lenders. While this doesn’t bar it from being a viable startup funding source, it is definitely something to consider.


This is also known as bootstrapping. You know, pulling yourself up by your bootstraps and all of that. Basically, this is when you figure out how to use what you already have as startup funding. This could include a number of options including:

  • · Savings
  • · Retirement
  • · Credit cards
  • · Additional mortgage on a home
  • · Home equity line of credit

If you use retirement or savings, then you can rest easy knowing you don’t have to pay anyone back but yourself.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.

Gravitational Pull

The downside to this option is either the loss of retirement or savings, or significant personal debt. If your business is successful, it is not a problem. If, however, your business does not do well, you could find yourself with some pretty major financial issues.


Crowdfunding is a source of startup funding that isn’t always considered viable. The main reason is that it is a long shot. There are not a ton of successful crowdfunding campaigns on a regular basis. There are some truly huge success stories out there however, and that makes it worth a shot for sure.

What is Crowdfunding?

Crowdfunding is essentially exactly what it sounds like. It is funding received from a crowd of people. The idea is that you create an amazing online campaign using the crowdfunding platform of your choice, and hope to convince the masses that they want a piece of the action.

Typically, you offer some sort of reward for a donation. It may be some trinket, or it can be a share of the profits. You can also offer different rewards based on donation level. Kind of a “the more you give the more you get” kind of thing.

Investors can give as much or as little as they like, from $5 or less to the sky’s the limit.

Popular Crowdfunding Platforms

There are a lot of crowdfunding platforms, but the two most popular are Kickstarter and Indiegogo. While they are very similar in most ways, they do differ in one major way.

For each, you have to set a funding goal. Kickstarter requires the campaign to reach the goal before you can access any of the funds. Indiegogo allows you to choose whether you want to receive funds as they come in, or wait until you reach the goal.

Indiegogo also offers an option to keep accepting funds on the same campaign even after you reach the original goal, rather than having to launch a new campaign to raise more funds.

Gravitational Pull

A very small percentage of crowdfunding campaigns are successful. This shouldn’t deter anyone from trying, but there needs to be a realistic realization that a backup plan may be necessary.

Small Business Grants

There are small business grants available if you qualify. Most often these are available to certain demographics including:

  • · Women
  • · Minorities
  • · Veterans
  • · Businesses in low-income areas

startup fundingIf you fall into one of these categories, a quick search could be very fruitful. There are grants available to those that do not fall into these categories, but they are not as common.

There are some grants offered by the government, but most often they are not awarded directly to businesses. Rather local governments and nonprofits disburse the funds. This may involve nothing more than accepting applications and awarding funds based on eligibility until money is gone.

Corporations and professional organizations also sometimes offer private grants as well based on their own application criteria and eligibility requirements.

Gravitational Pull

Grants are an awesome source of startup funding if you can get one. However, they are highly competitive and therefore not guaranteed.

Create Your Own Startup Funding: Side Hustle

This one is a personal favorite. It could fall under bootstrapping, but in my opinion, it deserves its own category. While you are technically self-funding, this option requires you to work to raise funds rather than using funds you already have available or take on more debt.

It also, in most cases, requires keeping your day job. When you use a side-hustle to create your own startup funding, the process is pretty slow. This is why most do not care to use this option. There are many benefits however.

Benefits of the Side Hustle

The first is that you can gauge the market a little. If you use your business idea as your side hustle, you can get a feel for what kind of demand might be out there. For example, if you want to open a bakery, you could bake breads, cookies, cupcakes, or whatever your specialty may be on the side and sell it.

As you do so, you can save any funds you earn to go toward growing your business, and in the meantime, you are gaining a following and making a name for yourself and your product.

Your side hustle does not have to be your business idea at all. It can be as simple as cleaning or babysitting around your day job hours. The point is that you put every penny you earn back for  funding your startup.

Gravitational Pull

This is a slower option, and some people do not want to wait that long.

Investors: One of the Oldest Forms of Startup Funding

One of the most obvious options, other than small business loans, is to find investors. This would be significant investment from one or a few different people, rather than small investments from a large number of people like in crowdfunding. In addition, investors most definitely invest in exchange for profit sharing, usually in proportion to their investment or a percentage they agree upon from the beginning.

Gravitational Pull

You give up some of your earnings. That’s not fun, but it could be worth it for the right investor.

Discover our Get Business Credit guide, with everything you need to know about building credit for your business.


You could also take on a partner. Sometimes the power of two is way stronger when it comes to startup funding. Where your credit score lacks, your partner’s may be strong. In most cases in life in general, two are better than one.

Gravitational Pull

Depending on how the partnership is structured, you may give up some of the managerial control.  Just like with investors, you will definitely give up a portion of the profits.

Contests: The Longest Shot Option for Startup Funding

There are contests out there that offer startup funding as a prize. Think Shark Tank. You could try to get in on that specific contest, but there are smaller scale contests out there also. Similar to crowdfunding and grants, they are not guaranteed. They are certainly worth a shot however.

Some of them simply award prize money, while others, like Shark Tank, award investment funds. Either way, it is money you can use for startup funding that you do not have to pay back.

Gravitational Pull

Like grants and crowdfunding, winning a contest is not guaranteed.  It could end up being a lot of work for little to no payoff. 


 startup funding Credit SuiteIt is difficult to fund a whole business by bartering, but in conjunction with one or more other sources of startup funding, it could be just the burst of energy you need to get you over the hurdle. Basically, it can make the funds you already have from other sources go further.

What does this look like? Maybe you are great at keeping books, and you have a friend that is great at social media. You may offer to do his books in exchange for his creating and managing your online presence.

Maybe your buddy is adept at designing websites, or has a space that will work as a location for your business. You could offer equity in the business in exchange for a website or use of the space.

Gravitational Pull

Not everyone is keen on bartering.  It may be difficult to find someone to enter this type of agreement.

You Might Have to Get Creative, but You Can Fly over the Startup Funding Hurdle

Sometimes the traditional ways work, and sometimes they do not. In those cases, creativity can be your best friend. You may have to use a few different sources of startup funding. It may take longer than you originally anticipated.

If you work on winning grants or running a side hustle, it may feel like that hurdle just keeps getting taller and you will never make it over. You may have applied for loans and not be able to get approval. Now you have bruises on your shins and you are wondering if it is worth it. It is.

Just keep trying. Get a running start, and when you finally make it over the startup funding hurdle, you will be that much stronger for running the rest of the race.

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

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