Skip to content

Sources of finance

Before deciding on a finance option, see what else is available

On this page

  • Explore a range of financing options to help your business grow

The bank isn't your only source of finance. One of the following resources may work better for you and your business:


Crowdfunding is a great option if you've already got strong networks and want to build loyalty before you start.

Crowdfunding raises funds or capital by using online and social media networks to ask a large number of people to contribute money towards a project – in exchange for a good, service or equity. In most cases, money is raised through fundraising websites, such as Pozible or Equitise.

Our page on crowdfunding provides more details, and shows you how to set up a successful campaign. 

Watch this video from Pozible for an overview of what crowdfunding is and how it works.


Crowd-sourced funding

Introduced on 29 September 2017, start-ups and small and medium-sized businesses (SMEs) now have the opportunity to raise money from the public to finance their business. 

Different from the donation based crowd funding – typically used by artists or entrepreneurs to raise money for one-off projects – crowd-sourced funding (CSF) gives eligible businesses an opportunity to raise small amounts of money from a large pool of investors.

Aimed at helping SMEs and start-ups to begin or grow their business, or pay off existing debts, each investor can invest up to A$10,000 a year in a company – in exchange for receiving securities in the form of shares.

Eligible companies can raise up to A$5 million per year using CSF, provided that:

  • they're a new and existing Australian public company seeking funding by issuing ordinary shares
  • they don't have listings on a stock exchange – such as ASX or Chi- X
  • they have less than A$25 million in assets and annual revenue.

Find out more about crowd-sourced funding


A bootstrapped business is characterised by:

  • growth through immediate earnings
  • minimal overheads – for example, the start-up easily operates from a garage or spare room
  • use of credit cards and reliance on advances from customers
  • use of networks – the product or service works well through direct sales and contacts
  • leasing, rather than buying equipment
  • multi-skilling – the CEO is also the cleaner, teams and defined roles come later.


  • is a way in which a small business can finance its operations without having to borrow substantial amounts of cash
  • means a business can become operational very quickly – without having to find start-up capital 
  • suits the very small business that can't attract venture capital due to its size – but the business may attract capital from larger investors once it has grown and positioned itself
  • also suits the company that wants to hit the ground running and take quick advantage of market opportunities.

A web search using the phrase 'bootstrapping business' will bring up many websites with tips and strategies for the entrepreneurial business person who has a great idea, but no finance.

Business angels

'Business angels' invest in new or expanding businesses. They're usually involved in the business, either directly or as a mentor. 

Business angels:

  • can be individuals or businesses keen to operate in the area of risk capital – when they invest, they take on part of the risk of growing a new business
  • can make investment decisions fairly quickly
  • can provide development capital
  • can contribute their business skills and contacts to benefit a new business. 

Business Angels Pty Ltd and Angel Investment Network provide registers where private investors and businesses can find each other. For a fee, the needs of the business are matched with the private investor's criteria.

Angel Investment Network has a short fundraising course consisting of four modules that provide information on the steps involved in gaining funding, mistakes to avoid and best practice guidelines. This site also contains other helpful information and templates to support small business fundraising efforts.

Venture capital

Venture capital is high-risk capital directed towards new or young businesses with prospects of rapid growth and high rates of return. 

Venture capital is an investment not only of money, but also of skills and time.

Venture capital businesses will provide capital for: 

  • the research and development of a business idea
  • early stage businesses
  • later stage expansion
  • management buyouts
  • buy-ins of established businesses.

Family loans

Asking family members for a loan can result in flexible payment arrangements – and the finance can become available quickly – but it's highly advisable to put your agreement in writing. 

There's a danger of harming family relationships if things go wrong – so when agreeing to a loan – set things up in a business-like manner as much as possible.

Invoice finance

Invoice finance enables a business to improve cash flow by getting customer invoices paid immediately – instead of waiting 30, 60 or 90 days for payment. 

Online invoice finance platforms, such as Timelio save you time with a fast online application and flexibility to finance invoices on a "pay-as-you-go" basis. Timelio provides a peer-to-peer marketplace matching you directly with investors to buy your invoices.

How is invoice finance different from a loan or overdraft? 

Invoice finance is the sale of an asset – your customer invoice and your entitlement to this payment.  

Selling a share of your business

Shares represent part-ownership in a business and – if the business trades profitably – the shareholder will get payments in cash, called dividends. 

'Equities' is another sharemarket term for shares – representing part-ownership of a business.

For example, you may wish to finance the expansion of your business by selling 25 percent of your existing business to an investor. If your business was valued at $1 million, selling 25 percent would provide you with $250,000 of capital to fund your expansion. However, the investor would be entitled to 25 percent of your profit.

Shares enable the established business to raise capital. This can be done privately, or by listing the company publicly on the stock exchange and inviting financial participation.

An Australian Stock Exchange (ASX) public share float is suitable for the large, established company that can manage the cost of setting up a successful float, and listing the company.

The National Stock Exchange of Australia specifically lists small and medium businesses and may be an appropriate avenue for a small business to raise capital.

Other resources

SBS Small Business Secrets' How to Get Funding for Your Small Business video gives further advice on three ways you can get funding for your small business: friends and family, crowd funding and angel investors.

A person puts a ball into a laughing clown carnival game

Watch video 

The Small Business Finance website is jointly developed by the Australian Bankers' Association and CPA Australia. Before applying for a loan, it is important for small businesses to decide if debt finance is right for them. This website shows how different types of finance may suit different small businesses. 

Visit website