Having a work-at-home business doesn’t mean you avoid spending any money on your business. There are still the costs associated with advertising, shipping, incorporating and web hosting. If you’re sourcing product and finishing it, there are purchasing, storage and possible spoilage costs associated with that venture too.

Because of these expenses, even entrepreneurs who have work-at-home businesses still need money. Luckily, there are several different ways to procure funding for your home-based business.

1. Crowdfunding.

Crowfunding has been a popular means for many businesses to raise funds and gain some notoriety too. Sites like KickStarter, Indiegogo and GoFundMe make it possible for just about any business owner to raise money. In exchange for that money, backers receive incentives like coupons or product samples.

The big advantage with crowdfunding is that you don’t need to pay back the raised money, and that’s true even if your business venture fails. The main disadvantage with crowdfunding is that you are in charge of creating and promoting your fundraising event, and the success or failure of your fundraising truly depends on how well you can sell your business idea.

2. Equity crowdfunding.

For those work-at-home businesses that require larger sums of capital or can’t provide adequate incentives for backers, there is equity crowdfunding. In this scenario, businesses offer stock shares to backers in exchange for money. Those resulting shareholders then have a say in the business and oftentimes collect a dividend.

Equity crowdfunding has gotten some heat from the SEC regarding its inherent risk to investors. However, with the passage of the JOBS Act, it is here to stay.

The advantage of equity crowdfunding is that you can now raise very large sums of money from individual investors without having to rely on venture capitalists or banks. The bad news is that, once the money is successfully raised, your business is subject to the opinions and votes of stockholders.

3. SBA-facilitated loans.

The Small Business Association (SBA) does not provide grants to businesses that are starting out or expanding unless those businesses are in the non-profit or educational sector. However, the SBA does provide a wealth of resources for locating and securing business grants through third party businesses and organizations.

In addition, the SBA website links to mentoring organizations such as SCORE (Service Corps of Retired Executives), the Small Business Development Centers (SBDC), Veterans Business Outreach Centers (VBOC), and the Women’s Business Centers (WBC). These organizations provide advice on such topics as how to actually start a business, hire employees, comply with local health/safety codes, etc.

4. Peer-to-peer lending.

Sites like Prosper, FundingCircle and LendingTree enable businesses to raise money through a practice known as peer-to-peer (P2P) lending. In this scenario, funds are raised from individuals instead of banks. Several individuals typically coalesce and pool their funds to originate a single loan for a person or business. In return, that person or business pays a monthly interest fee to the backers. The loan itself is paid off in monthly installments that stretch over a period of years.

The great thing about P2P lending is that anyone can raise money through this platform and for just about any purpose. The disadvantage with P2P lending is that it’s not free, and depending on one’s credit score, could come attached with an interest rate as high as 10%.

5. Bank loans.

You can also secure financing through a typical bank loan. While interest rates on business loans are starting to creep up, they are still fairly low compared to those seen a decade ago. Furthermore, many local banks and credit unions are willing to cut interest rates for area entrepreneurs who are just getting started.

To improve your odds of getting a loan, as well as a low-interest rate, you should create a business plan that showcases some proof of future profitability for your business. You should also incorporate your business and select its partners/employees.

6. Business contests.

Universities, cities, states, business organizations, clubs, non-profits and hackerspaces frequently feature business contests for budding entrepreneurs that can put hundreds to even thousands of dollars in your pocket for growing your work-at-home business. To learn more about such opportunities, visit your local Chamber of Commerce or go online and search on terms like “business pitch contest.”

Many businesses get started by winning sponsored contests. The biggest advantage of winning a business contest is that the money doesn’t have to be paid back. Of course, the biggest disadvantage with contests is that the competition can be fierce, and the odds rather low, for winning them.

7. Friends and family.

Not to be overlooked, your friends and family can become your biggest business backers- but only if you know how to approach them. To begin with, don’t assume that your friends and family should be throwing money at you simply because you know each other. Instead, assume nothing and pitch them exactly as you would a bank or other lender. Prepare your facts, figures and articles of incorporation. Denote how much supplies and talent will cost. Maintain all records of your revenues, losses and profits.

With friends and family, your biggest advantage is receiving money (oftentimes interest-free) and loving advice. The disadvantage with friends and family is that they will hound you about their loan, and certainly before you said you would pay it in full with (possible) interest.

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