To start a business, you need to raise capital. Capital can be in terms of financial or economic resources. 

You will hear people advising or suggesting the best way to raise the capital you need to borrow.

Who do you borrow from when you have lots of debt from say your HELB loans?

As a new business owner, you don’t have any bank backing you unless.

Banks want to deal with established businesses with a long line of credit history.

In other words, banks don’t invest in startups.

Young aspiring entrepreneurs opt-out of venturing into startups because they lack the means to fund their business activities. 

A lot of entrepreneurs are usually college graduates who are already knee-deep in college debt and wouldn’t want to borrow a loan to fund their startup. 

Why would they want to borrow funds to start a business where success is not a 100% guarantee?

For this, these entrepreneurs seek ways to fund their startups without taking out loans.

This, they do for peace of mind and to reduce financial burden.

Borrowing funds may sometimes involve a lot of processes and assessments of the viability of a business and the business plan, which are time-consuming and frustrating. 

Despite loans being one of the surest ways to get funding, there are options to get funding without borrowing from any financial institution or person.

You can start a business with money from your family or friends.

So, who is in your network of friends?

Can these friends help you or connect you with someone interested in your startup?

Finding money to help give life to your startup doesn’t have to be a tedious and helpless process.

You can fund your startup without borrowing using the methods below.

How to Fund a Startup Without Borrowing

Taking out a loan can be a bad way to start up your business. Here is how you can raise your funds for your startup without having to borrow from anyone. 

Personal savings

It is no secret that this is one of the easiest ways to get funding for a startup.

When you have a creative idea for a startup and you do not know how to finance this new venture, start by setting some money aside for this purpose.

Set a target limit for the amount you want to raise and be disciplined as you save.

There are numerous mobile banking apps that you can install on your smartphone for these services.

Some banks may award you interest for the amount of money you save in their banks.

Once you have reached your goal and you are ready to start your business, decide how you are going to allocate your personal savings to your startup.

Are you going to put in the full amount or are you going to distribute the money according to the business needs?

Having a business plan will help you budget your finances so that you do not end up spending on what you did not bargain for. 

Family or friends

When starting a business, people close to you are likely to help you start your business.

These are your friends and family.

They are your closest circle.

Your friends and family want to support you, give you strategies and ideas and keep you motivated. They may offer financial assistance to help you get things started.

It may be in terms of a loan or a generous offering to help you achieve your dreams.

However, be careful with friends. Some might be cunning and start feeling some sense of entitlement over your business once it progresses.

Before you accept money from them, make sure that you have set clear boundaries and that they are people whom you can completely trust. 

Partner with someone

Being a solopreneur can be a daunting task.

There are a lot of weights you have to carry on your shoulder, one of them being the financial burden.

To avoid this, pitch your idea to someone who is interested and look for a way forward together as partners.

Since you both have shares in the business, decide on how you can both raise funds to get the business rolling.

Sharing costs means a reduced financial burden, therefore you do not have to borrow a loan to fund your startup.

Keep your normal job

Sometimes it is liberating and easier to quit your day job and dive into your own business.

However, do not quit your normal job if you do not have a sound financial plan for your business.

If your 9-5 job pays you enough money to get you by, as well as set some aside for your business, it is important to keep it.

Go into your startup with a good financial plan, so that you may avoid borrowing funds to cater for your business needs.

If possible, start your business and operate it as a side hustle as you keep your day job.


Crowdfunding is one way to start a business without borrowing funds.

What crowdfunding means is that many individuals pool their money together for a common goal, via the Internet.

There are many crowdfunding sites where you can get well-wishers who want to help you achieve your goals.

All you have to do is create a profile and write your story.

Your story should be acceptable and one that influences change. Use GoFundMe or Kickstarter for your crowdfunding needs.

Trade equity or services

Trading equity and services is an easy way to raise funds for your startup without borrowing.

For example, if your startup idea is to open a cyber cafe, you may offer up your computers to a business that wants computer services at a fee.

This will make you raise enough funds as you build on your skills.

Trading equality and services can be quite risky.

Examine alternative options before settling for this as a way to raise your startup funds.


Investors are people who are interested in making money out of your business.

To get an investor, write a well-detailed business plan and explain how your business is going to generate profit.

Investors do not want to put their money into a business that is going to cause them huge losses.

If your business idea is credible, investors will decide to pool in their funds in exchange for shares in your startup.

Home equity

Home equity includes valuable home items that can be sold to start your business.

If you have any equipment or household items that you do not use and are valuable, consider selling them to get funds for your startup.

Jewellery, kitchen appliances and car spare parts can be sold at reasonable prices to raise enough money for your business. 

Merger and acquisitions

A merger occurs when two companies come together and start operating as a single entity.

An acquisition occurs when a business is bought by another bigger business and its activities are controlled by the bigger business.

Mergers and acquisitions are one way to raise funds for your startup without borrowing funds.

Through mergers and acquisitions, your startup gets to grow and reach maximum potential, with the help of other companies.

Innovation contests

Innovation contests allow entrepreneurs with startup ideas to come together and pitch their business ideas to business owners and investors.

Contestants who win are given an award (usually money) to help them bring their idea to life.

If you are not one of the lucky winners, an investor may have heard about your business and found interest in it.

They may decide to fund your startup, provided they get their share of profit. 

Government grants and subsidies

The government may offer financial aid to entrepreneurs who have great ideas for startups.

One of the main reasons why the government gets involved in many startups to stabilise them is to create employment for the youth.

If your business allows a platform for employment, apply for government aid for your business.

This money is not borrowed and you are not required to pay it back.

How Do I Get Money to Start a Business Without a Loan?

Start a side business

Start a product presale

Rent out your home to raise money

Hire your skills out for three quarters of the price or half the price


Personal savings

Get an Angel Investor

What are Examples of Startup Costs

Licences and permit fees

Equipment and supplies

Research expenses


Payroll and benefits




What Profitable Startp Can I Start Today in Kenya?

Taxi booking

Car Wash

Accounting /bookkeeping

Courier services

Video editing

Image sharing services

Chatting app

Delivery services

Business consultancy

Instagram influencer

TikTok consultant

Social media manager/marketer


Remote customer service

custom furniture maker

Electric vehicle charging station

Sell/manufacturer reusable bags

Yoga instructor



Jewellery maker

Interior decorator

Wedding planner

Virtual assistant

Website developer


Translation services

Freelance writer




Print On Demand services/business

Mobile and computer repair

Event planner


Voice over services

Travel consultant

Graphic designer

Online dating services/consulting

App developer

Affiliate marketer

Create and sell online courses

Buy and sell domains

Nutrition coach

Fitness coach

Career coach

Teach English

UI/UX designer

Sell photos

Food truck

Rental bikes

SEO consulting

Content marketer

How Can I Start My Own Company?

Conduct market research

Have a business plan

Get funding

Pick a location

What’s your business structure?

Register your business

FAQs on Funding a Startup Without Borrowing

  1. What’s the best way to get funding for a startup?

Friends and Family

Chama, Merry Go Rounds

Bootstrapping /Organic growth – the best way to raise capital according to me.

Join contests


Angels (Investors)


Peer to Peer Lending

Youth Fund Loans

2. How hard is it to get funding for a startup?

Depends on where you’re looking for funding. If looking for banks to help you fund your startup, banks are stringent they

3. Can anyone invest in a startup?

Yes, anyone can invest in a startup.

Be wary, do your due diligence or get an investment banker to help you understand a market before investing even a shilling in a new business.

4. What happens to investors if a company fails?

You lose your money.

5. How can I raise money fast?

Take on odd jobs

Sell unnecessary things to raise money

Borrow from friends/family

Start a side job.

Resources on How to Fund a Startup Without Borrowing

What are Startup Costs for You to Consider in Kenya

How Can I Start My Own Company

Tricky Things to Know About Business Not Tied to Starting

Dark Sides of Entrepreneurship No One Talks About in Kenya

90+ Profitable Businesses to Invest in Kenya

Businesses That Aren’t Capital Intensive for Kenyan Entrepreneurs

Startup Ideas for Broke Kenyan Entrepreneurs

Can You Start a Business Without Money in Kenya?

When you want to fund your startup with no money, do not always go for borrowed loans to get you started.

Examine alternative options that will not leave you in a series of endless debts. 

It is every entrepreneur’s dream to get the best out of his business without being tied down by other financial responsibilities outside the business. 

Your startup is likely to succeed fast if you refrain from borrowing funds for your startup.

To avoid borrowing funds, make sure you have a sound financial plan before you start your business. 

Are you wondering how to fund your startup? You are thinking, I have no friends or family to help me fund my startup, what must I do?

The best way, I discovered to fund whatever business venture I have isn’t to borrow from friends and family but to bootstrap.

Organic growth is painful and slow sometimes but the best way to fund your business.

You can do this by asking what skills do I have and how can I use my skills to help fund my business?

For example, if you’re a writer that starts by writing blog posts or even high-demand books on Amazon then sell them to make money.

You have to research what books are selling then write books in those niches.

Borrowing money to start your business is lengthy, discouraging and before you know it, you give up.

Are you planning on funding or starting a business? What ways are you using to raise money/capital for your business?




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Online Businesses / Online Work in Kenya