Startup Finances

From loans and grants, determine the best way to finance your business.

Funding your business:

Starting a business can be expensive. But there are resources such as grants and low-cost loans to help you finance your business. Be sure that you plan and save enough cash to operate your business for at least the first two months. This may include the amount of money you need to cover your startup expenses such as buying equipment as well as permit or license fees. It may take time to set up before you have enough customers to be profitable.

Using the calculations and estimates from your business plan, decide if you have enough money to begin, or if you need additional capital first. Lenders want to see that you have some of your own capital invested in your business. 

Financial Projections: You will need financial projections for at least the first three years of operation including a forecast of future sales and the costs to run your business. 

Funding Options:

  • Credit Lines: Maintaining good personal and business credit will help your business secure financing and get approved for loans. Nav.com has a helpful article about establishing and building business credit.
  • Loans: There are many types of loans available to business owners such as SBA loans, Term loans, and equipment financing loans. Many banks will also give loans to small businesses. Loans may be used to buy commercial kitchen appliances, flatware, furniture, and other items needed to run the business. The requirements for these loans may be more demanding and interest rates may also be higher. We encourage you to contact your bank for current rates and terms.
  • Grants: Grants may be available for business. Some grants are for businesses at a specific stage or to support business owners from certain communities (ie women, BIPoC, startup).
  • Investment: Business owners may pursue investment opportunities to cover startup costs. In addition to money, investors may provide other assistance such as marketing, public relations and financial planning.
  • Crowdfunding: Crowdfunding is the process of raising funds for a business from a large number of people, called crowdfunders. Crowdfunders aren’t technically investors, because they don’t receive a share of ownership in the business and don’t expect a financial return on their money. Instead, crowdfunders expect to get a “gift” from your company as thanks for their contribution. Often, that gift is the product you plan to sell or other special perks, like meeting the business owner or being acknowledged somehow. Crowdfunding is a popular option for people since it helps build awareness and potential customers. Crowdfunding is also popular because it’s very low risk for business owners. However, there could be risks and obligations if the business does not succeed. Every crowdfunding platform is different, so make sure to read the fine print and understand your full financial and legal obligations.

  In March 2023, authors from Michigan State University published a directory of national and local funding sources for food-related businesses in the US. Click here to access and download this resource  

Organizations Supporting Food Businesses

These organizations offer support for budding businesses in the consumer packaged goods and food & beverages categories.

City-Related Programs Supporting Food Businesses

Creating a Gold Standard Product

Determine the Food Business Type