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Startup funding options

How you acquire the capital your business needs to operate is a personalized journey.

(Want to figure out how much capital you need? Start here.)

Personal investment

This is the top source of funding for small business owners. Investing your own cash demonstrates to lenders and investors that you’re prepared to commit. This investment doesn’t have to be cash—it could include assets or equipment, like your vehicle for a delivery service or your camera and other equipment for your photography business. 



In this option, you self fund from the ground up, only using your new company’s operating revenues to grow. You’ll keep all the equity and control without loans or financing.

Generally, bootstrapped startups rely on personal savings and sweat equity (time plus physical and emotional investment), allowing you to launch faster. Due to how bootstrapped startups are funded, owners are hyper focused on the bottom line, which can lead to higher profit margins in the short term.

However, there’s a possibility you could experience more stress by bootstrapping. It can also place your business at unnecessary financial risk with unexpected costs and may not provide the capital needed to properly establish your company. 


Credit cards

Credit cards are convenient, but your interest rate will play a significant role in the impact on your business in the long run. Find the best credit card to fit your business needs by weighing the interest rate and rewards. Some cards may have fees or higher interest rates, but these are offset by higher reward returns.

Credit cards offer more mobility for small businesses accessing a variety of suppliers where a credit note may not be feasible. Look for a card with a low interest rate and flexible repayment terms for when your cash flow fluctuates and you need a short-term solution. 

Lines of credit

A line of credit is a short- or long-term fixed-amount loan that you can use as needed for cash flow and operating expenses. A benefit is you only pay interest on what you use—just take into account how high the interest rate is.

While a line of credit is a great option for covering gaps in cash flow, it wouldn’t work well for items with longer repayment cycles—like larger purchases, including bulk inventory procurement or equipment.


While a line of credit revolves and allows you to borrow money up to a limit, repay it and borrow again, a loan supplies an entire lump sum upfront that you repay over some time.

Loans are one of the most common ways to finance your small business. To qualify, you need to meet specific criteria and submit an application. Entrepreneurs looking for loans need to show due diligence, a good credit rating and a detailed business plan clearly outlining fund use. Look at the overall cost of the loan compared to your business’ startup costs to determine if a loan is right for you.


Family and friends

There are perks to getting a loan from friends or family—you’ve already built trust with them, plus they may charge little or no interest and offer repayment flexibility.

If you choose this route, communicate clearly with your personal connections to make sure everyone understands the terms of the investment, loan or gift. Always put the terms of your arrangement in writing to show that all parties have read, understood and agreed on the conditions. Have a lawyer review your agreement to prevent potential conflicts and complications. 


Entrepreneur-focused organizations

These loans are often term specific, don’t require collateral and may offer incentives for early repayment. Check to see if there are any conditions on how to use the funds.

The benefits of getting financial investments from entrepreneur organizations like Futurpreneur go beyond funding—you could also receive mentorship and coaching.



Grants for new businesses are available from government and private agencies or non-profit organizations. They’re generally paid in a lump sum and are term specific.

Though grants usually don’t require repayment, the mandatory followup reporting can easily get lost in the day-to-day tasks of entrepreneurial life. Take note of important dates and information from grants you’ve received or you may be required to pay part or all of the money back.

Grants are often a great resource for startups that are part of equity-deserving groups, such as women and Indigenous entrepreneurs. There are also grants available for a variety of business stages and industries, including tech, arts and culture, and agriculture.


Equity investment

Equity investors look for a stake in the company—stakeholder input or a percentage of shares—in exchange for startup cash. There’s generally an understanding that their cash may not return investment as quickly. They take a long-term approach to success.

These investors may request equity in exchange for assets or equipment instead of giving cash. You may look for equity investment several times during your business growth journey.


Venture capital

Venture capitalists (VCs) are a type of equity investor. They usually look for higher-risk projects with the potential for higher rewards. You’ll need to give up a percentage of ownership in your company, but VCs can also provide the benefit of mentorship with relevant experience and knowledge.

VCs are always looking for the highest return on investment on their funds, and therefore, less than 1% of startups successfully raise venture capital


Incubators and accelerators

Typically geared towards innovation and tech-based businesses, accelerator or business incubation programs can support new businesses through technology, workspace and mentorship opportunities. Depending on the type of incubator program, support may be targeted towards job creation, community revitalization or other economic investments.

These programs are longer-term investments and involve partnering with businesses for several months to years. Accelerators and incubators may provide seed capital to startups in exchange for equity or ownership in the business.


Make the best decision

With the right knowledge, you can approach startup financing with confidence. An ATB business advisor can help build a holistic picture of your funding needs.

ATB’s Entrepreneur Centre has a variety of resources to get you started, including our Startup Costs Template and market research education