1. Make sure your credit is good and your personal finances are in order.
2. Establish a legitimate business presence.
3. Prepare a business plan.
4. Loan Yourself money. Use your own savings or retirement funds.
5. Look to family and friends. Mom and dad may require a little less due diligence than the neighborhood bank. If a good friend or family member wants to invest, that's great -- but be sure to draft a business plan and write up all the appropriate contracts.
6. Partner with your vendors. If your business is already up and running, you may have vendors who believe in you and in your company. If your vendors have expressed an interest in investing in your business, draft a proposal and submit it to them.
7. Apply for microloans. Some banks, governmental organizations, and business groups offer microloans, which are exactly what the name suggests: very small loans that generally range between $100 and $25,000. Also, most microloans are issued based on your character and management ability rather than on an established credit history. Microloans, in turn, can serve as a springboard to additional financing, and financing establishes your company's creditworthiness.
8. Solicit government agencies. There are several sources of government funding to consider. The Small Business Administration (SBA) doesn't issue loans as such, but they do guarantee loans given by private lenders and banks. This reduces the risk that the bank assumes and makes them more likely to loan to your new business. Contact your local chamber of commerce for information on which government entities offer financing help.
9. Apply for grants. There are many different types of grants, and there could be one for your home-based business. However, it should be noted that grant requirements are strenuous, and there’s a great deal of competition for small and home-based business grants.
10. Talk to angels. Angel investors invest in fledgling businesses, generally because they know a good thing when they see it. They look for companies that exhibit good growth prospects, have a synergy with their own interests, or compete in an industry in which they have succeeded. If you are seeking equity capital from angel investors, you must be prepared to give up some equity -- and be answerable to your investor.