Business woman standing in front of a blackboard with a financial chart

When creating a solid business plan, the funding of your business is a critical step. The first thought is to apply for a loan or borrow money from a relative. These methods come with restraining a valuable asset or time. The finest place to find the best funding solution is your house. With enough savings, managing finances for business from your house over time, it is quite easy.

Bootstrapping is known as “self-funding”. It is a variety of different methods used by entrepreneurs for financing their startups other than a small business loan. The phrase, “pulling themselves up by their bootstraps,” means doing business without help from an outsider i.e. doing business without financial support from the outside.

Advantages of bootstrapping a business are that it is simple in nature, has little operating cost, is flexible and requires minimal time.

Here are ways to make funding a business from a house possible:

Source #1: Household savings

Savings are used as a business investment by many entrepreneurs. This is an ideal source. How much profit will be earned is in your control. No justifications to other investors need to be given.  It can be operated as you perceive best.

You need to be determined and sacrifice your luxuries to start saving so that you can obtain enough to launch a startup.

Source #2: Credit

Use of credit cards and a house equity loan is used as the source of funding but it can be risky. By utilizing these resources, your credit or home is at risk, so these should be used carefully.

Source #3: Family members and friends

Family and friends can invest in your business, however, if anything goes wrong, your relationship with them can be affected. Moreover personal and business relationships should be kept separate and investors should be treated professionally.

Source #4: Customers and suppliers

Prepayment by customers can be utilized as a business fund but, keep in mind, that customers will prepay only if exceptional services are provided by you and they are really interested in your products.

Managing finance for your business from supplier credit is another source. 30-60 days are given by suppliers to get payment after delivery. This credit can be an interest-free source of leasing. Getting credit form suppliers needs little effort but are a great funding source.

Source #5: Small Business Administration

The SBA offers Microloans to small business owners. Its range can be up to $50,000 and it can be easy to get. Training is provided to beginners.

Source #6: Peer-to-peer lenders

This personal loan is given to entrepreneurs by investors for startups. It is small (ranging up to $35,000 or more) in peer to peer lending personal credit which matters a lot for startups.

Source #7: Factoring companies

The credit of clients can be utilized as funding sources because most clients agree on 30-60 days to pay the invoice.

Source #8: Leasing

The equipment needed by a small business can be leased from a finance company on a month to month rent. After accomplishment of the lease period, equipment can be purchased.

Source #9: Crowd funding

Crowd funding is a unique way to manage finances for businesses. It requires pre-selling of products by you and pre-purchasing by customers. If sufficient consumers pre-purchase merchandise and the transaction clears, you can move onward and forward.

Source #10: The bank

Banks offer loan against assets, especially for commercial credit. These assets should qualify with the strict criteria of the bank.

Source #12: Government grants

Many loan schemes are started by the government to provide small business loans. This is the least reliable method.

Source #13: ACH Loans and merchant advances

ACH loans/merchant cash advances permit you to fund future trades. ACH loans are used to finance commercial sales whereas merchant cash advances are used to finance credit card sales. You pay back the lender by giving them a portion of your monthly credit card sales or by allowing them to debit your bank account through the ACH system (direct debit).


A reasonable amount of savings every month from the household and monthly income will give you greater and better funding for your business. All these methods are useful when your business planning is well organized.

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