Beyond the usual loans
Uncommon ways to finance a business or a home
Some of these are little known and genuinely useful. Others are expensive traps that look like shortcuts. Each one below says who it fits and what to watch for.
Money you do not have to pay back (and how to avoid the scams)
Real grants exist, but they are narrower than most websites suggest. SBA itself says it does not provide grants to start or expand a business; its grant money goes to nonprofits, resource partners and universities that run counseling and training, plus a few narrow programs for research, manufacturing and exporting.
Federal grants search (Grants.gov)
What it is. The official portal for federal funding opportunities. Applying is free, and you can search by who is eligible: small businesses, nonprofits, individuals and more.
Who it fits. Researchers and tech companies, nonprofits, farms and rural businesses, and organizations that serve communities. Very few federal grants go to individuals.
Watch out for. Most grants are competitive, reimbursement-based or require a match, and the paperwork is heavy. No government agency charges a fee to apply or phones you to offer a grant.
SBIR and STTR ("America's Seed Fund")
What it is. Federal research-and-development funding for small, for-profit technology companies. The programs lapsed on September 30, 2025 and were reauthorized in April 2026 through September 30, 2031, according to the Congressional Research Service.
Who it fits. Founders developing new technology that a federal agency (NIH, Defense, Energy, NSF and others) wants to see developed.
Watch out for. It funds R&D, not ordinary operating costs, and each agency sets its own topics, deadlines and award sizes. Agencies were still restarting solicitations after the lapse, so check for open topics.
USDA Rural Development programs
What it is. USDA runs grants and loan guarantees for rural businesses and agricultural producers, such as Value-Added Producer Grants and Rural Business Development Grants, plus loan guarantee programs.
Who it fits. Farmers, ranchers, food producers and businesses in eligible rural areas.
Watch out for. Program availability and rules shift with each year's funding. Some energy-related grant awards were reported paused in 2026, so confirm status on the USDA site.
State and local grants and incubators
What it is. Many states, cities and economic development agencies fund small business grants, façade improvements, startup competitions and incubators.
Who it fits. Local storefronts, startups in targeted industries or neighborhoods, and businesses that will create local jobs.
Watch out for. Amounts are usually modest, and many are matching programs. Your local Small Business Development Center (SBDC) knows what is open.
Mission-driven lenders and community capital
These lenders exist to reach borrowers that banks overlook. They often accept thinner credit and give coaching, though the loans may be smaller or cost more than a bank loan.
CDFIs (Community Development Financial Institutions)
What it is. Certified, mission-driven lenders: loan funds, credit unions, banks and venture funds. The U.S. Treasury's CDFI Fund certifies them and publishes a list; the Opportunity Finance Network also offers a locator.
Who it fits. Small businesses, startups, nonprofits, and homebuyers in underserved areas or with limited credit history.
Watch out for. Loans are often small, and personal guarantees or collateral are common. Each CDFI sets its own rates, so compare.
Kiva (0% crowdfunded microloans)
What it is. A nonprofit platform where individual lenders fund U.S. small business loans at 0% interest and no fees. Reviews and summaries describe loans of roughly $1,000 to $15,000 over 12 to 36 months.
Who it fits. Very small businesses and entrepreneurs with limited credit who can rally their own network.
Watch out for. You usually need to line up friends, family or customers to lend first, funding can take weeks, and terms change, so confirm current limits on kiva.org.
SBA Microloans
What it is. Up to $50,000 from nonprofit intermediaries, repaid within six years, for working capital, supplies, furniture, fixtures and equipment.
Who it fits. Startups and small businesses that want coaching with the money.
Watch out for. Not for real estate or paying off other debt; rates run higher than a bank SBA loan.
Raising money from the crowd or your own network
Customers and community members can be a financing source, either by pre-buying a product or by investing.
Rewards crowdfunding
What it is. Platforms such as Kickstarter or Indiegogo let backers pre-pay for a product or perk. You give no equity and take on no debt.
Who it fits. Consumer products, creative projects and anything people can get excited about before it exists.
Watch out for. You must deliver what you promised, platforms and payment processors take fees, and campaigns usually fail without a pre-existing audience.
Equity crowdfunding (Regulation CF)
What it is. U.S. companies can raise up to $5 million in 12 months by selling small stakes to the general public through an SEC-registered funding portal or broker-dealer. Investors who are not accredited face annual limits on how much they can put in, and the securities generally cannot be resold for a year.
Who it fits. Companies with a loyal community of customers who would like to own a piece.
Watch out for. You are selling ownership, with disclosure, filing and investor-relations obligations. Talk to a securities attorney first.
Seller financing
What it is. When you buy a business or property, the seller agrees to be paid over time instead of in full at closing. It is negotiated directly.
Who it fits. Business acquisitions, where lenders often like to see the seller keep some skin in the game.
Watch out for. Get the note, interest rate, security and default terms in writing from an attorney. Sellers' notes may need to follow lender rules if you also use an SBA loan.
Getting paid sooner: invoices, receivables and card sales
If you are owed money by customers, you can sometimes finance against it. These products are fast, and some are very expensive.
Invoice factoring and receivables financing
What it is. You sell or borrow against unpaid invoices and receive most of the amount now, with the balance minus fees paid when the customer pays.
Who it fits. B2B companies with slow-paying but creditworthy customers.
Watch out for. Compare the total fee over the invoice's life, not the monthly percentage. Check who contacts your customers and what happens if an invoice goes unpaid.
Purchase order financing
What it is. A lender pays your supplier so you can fill a large order you could not otherwise afford, then is repaid when your customer pays.
Who it fits. Resellers and distributors with a confirmed big order but little cash.
Watch out for. Usually costs more than other financing and works only if margins are healthy.
Merchant cash advances (use extreme caution)
What it is. A lump sum in exchange for a share of future card sales. It is structured as a purchase of receivables, not a loan, so loan-style disclosure rules often do not apply.
Who it fits. Rarely anyone, and only after cheaper options are ruled out.
Watch out for. The cost is a "factor rate." A 1.35 factor means you repay $1.35 for each $1 advanced; if that is repaid in six months, the cost is 35% in half a year, which is 70% annualized before accounting for daily or weekly repayment, and the true APR is higher. Stacking multiple advances and confession-of-judgment clauses are well-known traps. Ask for the APR in writing.
Using your own assets
These options use money you already control. They can be powerful, and they put your own savings or home at stake.
ROBS (Rollover as Business Startup)
What it is. A structure that lets you invest eligible retirement savings in your own new C corporation without early-withdrawal tax or penalty, using a specially designed 401(k) plan.
Who it fits. Founders with significant retirement savings who want to avoid debt.
Watch out for. The IRS scrutinizes these arrangements, you must follow ongoing plan compliance rules, providers charge setup and monthly fees (and often promote the strategy), and you can lose your retirement savings if the business fails. Get independent tax and ERISA advice before you start.
Home equity and 401(k) loans
What it is. Borrowing against your home or your retirement plan can be cheaper than business credit.
Who it fits. Owners who understand the downside and have stable income.
Watch out for. Your home secures a home equity loan. A 401(k) loan usually must be repaid quickly if you leave your job, and the balance is not growing in the market while it is out.
For homebuyers: help most people never hear about
State housing finance agencies (HFAs) run programs that can cut the cost of buying a home.
Down payment and closing cost assistance
What it is. Grants, second loans, forgivable loans or deferred loans offered by state and local housing agencies.
Who it fits. First-time and moderate-income buyers, and in some programs teachers, first responders or veterans.
Watch out for. Income and price limits apply, some require homebuyer education, and forgivable loans can require you to stay in the home for a set period.
Mortgage Credit Certificate (MCC)
What it is. A federal tax credit, issued through participating state or local HFAs, that returns part of your annual mortgage interest, up to $2,000 a year. It is a credit, not a deduction, so it reduces tax owed dollar for dollar.
Who it fits. Qualifying first-time buyers, and buyers in targeted areas or military veterans, within income and purchase-price limits.
Watch out for. It does not provide down payment money, it is generally used with a purchase loan, and fees and availability vary by state. Ask your lender and your state HFA.
USDA and VA loans
What it is. USDA guaranteed loans for eligible rural properties and VA loans for eligible veterans and service members can allow no down payment.
Who it fits. Buyers in eligible rural areas or with military service.
Watch out for. Eligibility and fees apply: USDA has income and location limits, and VA loans carry a funding fee for most borrowers.
Bigger and more specialized
These are for companies past the startup stage or with a very specific need.
SBICs (Small Business Investment Companies)
What it is. Privately owned funds licensed by the SBA that invest in or lend to small businesses using their own capital plus SBA-guaranteed leverage.
Who it fits. Established, growing companies that need larger amounts of debt or equity than a bank will offer.
Watch out for. Investments are often sizable and may involve giving up ownership or accepting mezzanine-style terms.
Export financing
What it is. SBA's Export Express and Export Working Capital programs and the State Trade Expansion Program (STEP) support businesses selling overseas.
Who it fits. Small companies entering or growing in export markets.
Watch out for. Requires export plans and documentation; STEP awards go to state programs that then help businesses.
Tax credits and incentives
What it is. Programs such as expensing of qualifying equipment, research credits and hiring credits can lower the real cost of an investment.
Who it fits. Businesses buying equipment, doing R&D or hiring from targeted groups.
Watch out for. Rules and limits change often. Ask a CPA before you count on them.
General information, not financial, tax, investment or legal advice. Program availability, limits and rules change. Confirm details with the program, an SBDC counselor, and a qualified tax or legal professional before acting. Figures are drawn from SBA, SEC and program sources reviewed in October 2026.