How to Raise Funds For Your Business (2023): 8 Ways

Running a business can be challenging, and many entrepreneurs face hurdles when it comes to securing sufficient funding. 

In fact, according to a report by the Small Business Administration, about 30% of small businesses in Singapore fail within the first 3 years, with insufficient funding being one of the key reasons for their failure. 

Fortunately, there are various financing options available for business owners aside from traditional sources, such as small business loans from alternative funding sources. These MSE loans can be a valuable source of capital for entrepreneurs looking to start, expand, or sustain their businesses.

How to Raise Money for Your Business at Various Stages

Whether you’re in the early stages of a startup, planning to expand overseas, or considering an IPO, there are financing options that can meet your needs. 

In the following sections, we’ll provide detailed discussions on each option to help you decide which one is the most appropriate for your specific business goals and stage of operations.

At a Glance

Financing Option Best For
Self-financing Startups and entrepreneurs funding their businesses
Bank loans Established businesses seeking diverse, flexible financing
Crowdfunding Creative, innovative, or charitable funding needs
P2P lending Businesses unable to obtain financing from traditional sources
Angel investing Early-stage startups seeking funding, equity, guidance, and mentorship
Venture capital Emerging companies with a proven business model seeking substantial capital investments and expertise
Fundraising Early-stage startups seeking exposure to investors, media, and the public to showcase their business ideas
Government supports Small-to-medium enterprises seeking financial assistance, tax incentives, training, and other business development resources


  1. Self-Financing – Best for Startups

Self-financing, also called bootstrapping, is a common way of funding your startup in an early business cycle. You pay for an office set-up, expenses for connections with your potential clients, and other costs, like advertising, related to your company. It is out-of-pocket funding for starting your adventure.

It is the most popular way to finance a business as the benefits are multifold: 

  • Bootstrapping is widespread among business owners as the cost of doing business is nearly zero, coming from personal savings.
  • Self-financing reduces the debt burden, especially in a rising interest rate environment, when you struggle to pay loan interest from income generated from your business.

Yet, it may not be a great fundraising idea as you may not have enough savings to fund an ever-growing business for reasons like tax or leverage benefits, so self-financing is a limited option for further expansion plans. You should look more below.

  1. Bank Loans – Established businesses seeking diverse, flexible financing

A bank loan is a common source to finance a business. Various bank loans are available: loans for working capital, business expansions, and IPO financing.

Business owners like to use this traditional option because it offers corporations flexible and diverse business choices.

The 5 best banks for businesses in Singapore are the following: 

  1. Development Bank of Singapore(DBS)
  2. Overseas Chinese Bank Corporation (OCBC)
  3. United Overseas Bank(UOB)
  4. Standard Chartered Bank
  5. Citibank

Furthermore, bank interests are lower compared with other types of debt financing.

However, bank loan options are limited in some aspects. First, a bank may need an asset pledge, like brick-and-mortar properties, to lend, so a business borrower may find fewer options for raising money if he does not have such assets of the kind.

Second, a bank may have strict lending requirements, which a borrower may find hard to request new financing after having a not-so-good credit history.

  1. Crowdfunding – Best for creative, innovative, or charitable funding needs

Startups can raise funds by issuing company shares to expand and operate businesses. The most popular funding form: equity, gives investors the right to receive profits and dividends.

Besides, a benefit: a business owner does not lose majority control of his company through the type of financing as the shares to be issued are small relative to a company’s capitalization. 

Popular crowdfunding websites are Indiegogo, Kickstarter for tech projects, Fundel, FundHere for startups, and GoFundMe.

However, crowdfunding financing is small due to companies’ small caps. Besides,  you should know small business funding is risky; therefore, investors are picky because of the high risks of loss compared with mature companies.

  1. P2P Lending – Best alternative option to traditional bank loans

Like crowdfunding, P2P(peer-to-peer fundraising) is a lending platform connecting lenders and business borrowers. What differentiates it from crowdfunding is its financing nature. Crowdfunding is concerned with equity investors, while P2P lending offers loans to businesses.

Popular P2P lending platforms like Capital Match, Funding Societies, MoolahSense, and Vulcan Capital offer a place for lenders and borrowers to reach loan agreements through matching activities.

One of the effective fundraising ideas, P2P lending suits businesses unable to obtain financing from conventional financial institutions like banks. Besides, borrowers get flexible repayment terms like determination of interest payments only at the time of repayment. Sometimes, businesses may get more favorable loan interest rates than other banks.

  1. Angel Investing – Best for early-stage startups that need funding, equity, guidance, and mentorship

Angel investors are affluent investors focusing on early startups. They are risk-takers hoping to reap the most significant rewards if a business venture is successful later on, e.g., IPO or acquisition. Businesses may save on fundraising efforts if a group of angel investors collectively invests in a business.

Angel investors can provide up to 30% equity to a business; besides, they offer other advice like running a business.

Startups looking for capital investments can search the website for more information and criteria to raise business funds.

  1. Venture Capital – Best for emerging companies with proven business model to accelerate growth

Unlike angel investors, venture capital invests in potential businesses with regular revenue streams. They invest for 3 to 5 years and look for an exit through an IPO or acquisition. 

Like angel investors, venture capitalists offer advice on running a business besides taking up a more significant portion of equity.

A limitation of venture capital investing is the short timeframe requiring a business to be profitable in a specified period. A business owner should face operational pressure and the possible loss of management control.

The notable venture capitals in Singapore include 500 Startups, Quest Ventures, and Golden Gate Ventures.

  1. Fundraising Events through Business Plan Competitions – Best for early-stage startups seeking to showcase their business ideas

A business plan competition is an excellent venue for raising funds for your business. Entrepreneurs have a chance for media exposure, where they can introduce their product ideas or business plans to investors.

In these real or virtual fundraising events, like the “Lee Kuan Yew Business Plan Competition” or “Citizen Entrepreneurship Competition,” business owners can have a chance of winning fundraising by presenting their products and business plans to a panel of professionals who decide on winners. 


A business can increase its chance of success by presenting its fundraising project to grab the public’s attention through competitions that host fundraising events.

  1. Government Supports – Best for tax incentives, training, and other business development resources.

Besides nonprofit organizations, the Singapore government, supporting local businesses or other small-to-medium enterprises(SMEs) through the local community, offers three loan programs to help business owners develop and expand.


The three grants are:


    • Productivity Solutions Grant (PSG) aims to provide financial support to technology ventures at up to 70% of costs.
    • Enterprise Development Grant (EDG) strikes to support larger SMEs to expand internationally.
  • PACT Scheme encourages partnerships between large and small enterprises by granting 70% of qualifying costs incurred by the partnership in business development and expansion.

Final Thoughts

Business requires financing to develop and expand or face failure in all stages of operations. The eight options above provide explanations about the financing details.


Key takeaways:


  • The eight financing options covered in the article include self-financing, bank loans, P2P lending, crowdfunding, angel investing, venture capital, business plan competitions, and government support.
  • Each financing option has its own requirements, benefits, and limitations, and business owners should evaluate their options carefully before choosing one.
  • SMEs can seek personalized support and guidance from dedicated teams to help them achieve their business goals.

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