{"id":5516,"date":"2016-04-04T10:48:00","date_gmt":"2016-04-04T15:48:00","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/start-up-financing.html"},"modified":"2026-05-12T00:35:00","modified_gmt":"2026-05-12T05:35:00","slug":"start-up-financing","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/start-up-financing.html","title":{"rendered":"Start-Up Financing"},"content":{"rendered":"\n
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Start-Up Financing<\/h1>\n\n
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\n By FindLaw Staff<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last reviewed\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Startup funding for a business can involve self-financing, small business loans, or selling equity to cover capital costs, equipment, and supplies. Entrepreneurs can seek business loans and pay interest or sell ownership shares to raise funds.<\/p>\n\n <\/div>\n\n\n\n

Any number of factors can make or break a new business<\/span>. Financing, or lack of it, tends to be among the most important. Start-up<\/span> funding also is one of the most difficult tasks for inexperienced new <\/span>business<\/span> owners<\/span>. FindLaw\u2019s Start a Business section provides information on working capital<\/span> and every funding option<\/span>.<\/p>\n

Generally speaking, there are two\u00a0types of financing<\/span><\/a>: debt financing and equity financing<\/span>. Debt financing is a loan, line of credit<\/span>, or promissory note. Equity financing<\/span> is a financial investment in exchange for a share of ownership in the business. (Of course, a business can also begin with a gift.)<\/p>\n

A prospective business owner<\/span> will need to decide two things upfront:<\/p>\n