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New York Business Funding: Loans, Crowdfunding and Investors

New York Business Funding: Loans, Crowdfunding and Investors


Loans allow you to borrow money that has to be paid back over time, usually with interest. There are several loan options specifically tailored to the needs of small businesses.

SBA Loans

The Small Business Administration (SBA) guarantees loans made by banks and other lenders to qualifying small businesses. This makes the lenders more willing to approve loans for startups and businesses that might not otherwise qualify. Popular SBA loan programs include:

  • 7(a) Loans: The most common type of SBA loan, with loan amounts up to $5 million. Can be used for working capital, equipment, real estate, and more.
  • 504 Loans: For purchasing real estate or equipment. Requires 10% borrower contribution.
  • Microloans: Loans up to $50,000 from non-profit lenders, often with more flexible qualification requirements.

To qualify for SBA loans, you’ll need a good personal and business credit score, collateral, and a viable business plan. Interest rates are competitive, usually between 6-13%.

Alternative and Online Lenders

If you don’t qualify for an SBA loan or need funding faster, alternative online lenders like Kabbage, OnDeck, and LendingClub offer small business loans with less stringent requirements. However, their interest rates are often higher, from 10-36%.

Business Credit Cards

Business credit cards essentially function as revolving lines of credit with more flexible repayment options. Popular cards for startups include the Chase Ink Business cards and American Express Business cards. Manage your balance responsibly to avoid high interest charges.

Friends and Family

Borrowing from people close to you allows you to avoid credit checks and qualifications. Be sure to formalize the terms with a loan agreement stipulating repayment schedules, interest, etc.


Crowdfunding campaigns allow you to raise funds from a large number of backers through an online platform. Popular options include:

  • Kickstarter: Backers receive rewards or the product itself in exchange for pledges. Best for creative projects with an existing fanbase.
  • Indiegogo: Flexible funding options. You get to keep the money even if you don’t hit your goal.
  • GoFundMe: Best for personal causes and charity fundraising, but some business campaigns do well here too.

Crowdfunding works best when you already have an audience excited about your product or service. Design rewards cleverly and run an aggressive marketing campaign to attract backers.

Finding Investors

Equity investors provide startup capital in exchange for partial ownership in your business. Here are some options to connect with potential investors:

  • Startup Competitions: Events like GENIUS NY and 43North offer prize money, mentorship opportunities, and access to investors.
  • Angel Investor Groups: Organizations like New York Angels and Golden Seeds have high net-worth individual investors looking to fund startups.
  • Equity Crowdfunding: Online platforms like WeFunder and SeedInvest let you raise smaller amounts from non-accredited investors.
  • Venture Capital Firms: Companies like Insight Partners and Greycroft invest in high-growth startups in exchange for equity.

Getting funded by investors has more stringent qualification requirements, like demonstrating traction and previous startup success. You’ll also have to give up equity and some control of your company. But the payoff in growth capital can be worth it.

Other Funding Options

Here are a few other ways New York business owners can secure capital:

  • Grants from government agencies and non-profits
  • Invoice factoring through companies like BlueVine
  • Asset financing by borrowing against inventory, equipment, invoices, etc.
  • Retirement account funds via ROLLOVER FOR BUSINESS STARTUPS (ROBS)
  • Personal assets such as savings, home equity, or liquidating stocks

Key Takeaways

  • SBA loans, business credit cards, and alternative lenders offer financing for those who qualify
  • Crowdfunding works by raising small investments from a large number of supporters
  • Equity investors and venture capital provide growth capital in exchange for partial company ownership
  • Grants, retirement funds, assets, and credit lines offer additional funding options

Securing capital is a crucial hurdle for any New York startup. With proper planning and persistence, there are viable options for funding your entrepreneurial aspirations right here in the Empire State. Reach out to our firm if you need assistance developing your funding strategy or connecting with investors. Our attorneys have worked with over 500 founders and funded over $2 billion in early stage companies.




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