Early-stage financing options for your business
Updated: 4 minutes ago
When business owners ran into a financial challenge in the past 12 months, 54% covered it with their own personal money, according to the Federal Reserve's 2025 Small Business Credit Survey. If you're running a business right now, that number may not surprise you. Bills come due whether or not your financing has come through. That's why it helps to know your early-stage financing options before the next one lands.
Newer businesses feel this the most. In the same survey, only 43% of businesses two years old or younger that applied for a loan, line of credit, or cash advance got the full amount they asked for.
That gap is why alternative financing continues to grow in popularity - below are five options to consider, what each one is good for, and where each one falls short.
Dao: a business credit card that builds credit from day one
If you've been putting business costs on a personal card, Dao is worth a look. It's a business card designed to help your company build business credit from day one. It's also revolving credit, so you can use it, pay it down, and use it again without paying off the full balance every month.
Checking your options starts with a soft credit check that won't affect your personal score. A full credit check comes later in the process, and Dao says it tells you before that happens. When your business is ready, Dao can match you with an SBA lender and help you apply.
Pros:
Revolving credit, so you don't have to pay the full balance each month
A soft credit check to see your options, so looking won't hurt your personal score
Secured and unsecured cards, which Dao says helps more businesses get approved
A Dao Score that shows where your business credit stands, plus a path to an SBA lender when you're ready
Cons:
Carrying a balance means paying interest
Lower maximum credit limits aren’t a good fit for a large equipment purchase or a big expansion
The card requires a personal guarantee, so you're personally responsible if the business can't pay
Next steps: See if Dao is a fit for your business
Rewards crowdfunding through IFW: raise money without debt or giving up equity
Rewards crowdfunding lets you raise money from people who already want your business to succeed, like your customers and your community.
It’s not a loan, and they don't get a stake in your company. Instead, you offer them a reward, such as early access to a new product, a discount, or merchandise.
A campaign also tests demand. Before you put money into inventory or a new location, you find out whether people will pay for what you're building.
Since 2016, entrepreneurs who started their funding journeys on IFW have raised nearly $200 million through crowdfunding and sponsored grants, and the IFW network includes more than 500,000 founders and funders. The four co-founders of The Coven raised $349,631 through rewards crowdfunding. Altadena Beverage and Market turned to a rewards campaign to help reopen after the Eaton Fire in Los Angeles County.
Pros:
No loan to repay and no ownership to give up
A strong campaign shows that customers want what you're building
Access to a network of more than 500,000 founders and funders through IFW
Crowdfunding coaching and grant opportunities you can use alongside your campaign
Cons:
Success depends on your own audience and outreach. The platform won't fill your campaign for you.
You need rewards people want, which is easier for product businesses than for some service businesses
A good campaign takes time to plan and run, so it won't fix a cash crunch overnight
Next steps: Start building your crowdfunding campaign
SBA microloans: smaller loans designed for newer businesses
If you need a smaller amount and don't have much credit history, look at the SBA's (Small Business Administration) microloan program. Loans go up to $50,000, but the average microloan is about $13,000, according to the SBA.
The SBA doesn't lend the money itself. It works through nonprofit, community-based lenders it calls intermediaries, and those lenders also provide guidance and support before, during, and after the loan. Rates generally run 8% to 13%, and terms go up to seven years.
Pros:
Designed for owners who have trouble qualifying because of limited credit history or collateral
Rates of 8% to 13%, far below what a merchant cash advance typically costs
Guidance and support from the lender before, during, and after the loan
A smaller ask than a typical SBA 7(a) or bank loan
Cons:
Capped at $50,000, so it won't cover a big expansion or a major equipment purchase
Lenders typically require collateral and a personal guarantee, and many look for a credit score of 620 or higher
Funding can take a month or more, depending on the lender
Next steps: See which options fit your business
Giggle Finance: fast cash for solo operators
The options above generally assume a registered business with at least some operating history. If you are a 1099 contractor, a rideshare driver, a freelancer, or a solo operator without that structure yet, Giggle Finance is built for you specifically. It advances cash against your future revenue, and approval does not depend on a credit check or years in business, just proof of some income and activity.
Funding moves fast, often the same day, in amounts up to $15,000 for new customers ($20,000 for repeat ones).
Pros:
No credit check, and no need for years in business, just a few months of activity
Approval and funding often land the same day
Prepayment discounts if you pay it off early
Cons:
Structured as a cash advance, not a loan, and advances like this commonly convert to an APR of 50% to 200% or more once fees are included
Rates and fees are not published, so you have to ask directly before accepting
Not available in California, New York, or Oregon
Next steps: See if Giggle Finance is a fit
SBA loans through NEWITY: larger loans with a shorter application
SBA 7(a) loans are partly guaranteed by the government, and the SBA caps the rates lenders can charge and sets terms of up to 10 years for most uses, longer for real estate. The tradeoff has traditionally been a slower process with more paperwork.
NEWITY is built to make that process faster. It works with partner banks as a lender service provider on SBA 7(a) loans up to $350,000 with terms up to 10 years. NEWITY says it has helped more than 125,000 small businesses secure more than $12 billion in financing, and that it can help you get funded three times faster than the national average.
Pros:
SBA rate caps and terms up to 10 years, which keep monthly payments lower
An application NEWITY says takes less than 10 minutes and won't affect your credit score
Loans up to $350,000, well above what a microloan or a business credit card offers
Cons:
NEWITY requires at least two years in business, so newer businesses won't qualify yet
Funding still takes weeks, so it won't cover a bill due tomorrow
SBA rules generally require a personal guarantee from anyone who owns 20% or more of the business
Next steps: Check your SBA loan options
How to choose
Each option above solves a different problem. A business credit card like Dao helps with everyday costs and starts your business credit file. Rewards crowdfunding turns your community into backers. A microloan can get a newer business a small loan at a lower rate. An SBA loan offers larger amounts if you've been in business for a couple of years and can wait for the money.
The right choice depends on how much you need, how fast you need it, how long you've been in business, and whether you're comfortable asking your community for support. Honeycomb Credit’s prequalification form can help you sort that out. Answer a few questions about your business, and we'll show you the funding options that fit, whether that's Dao, rewards crowdfunding, an SBA loan, or another partner in our network.
Disclosure: Dao, Giggle Finance, and NEWITY are independent partners, and Honeycomb Credit may receive compensation for referrals. This article is for general information only and is not financial, legal, or tax advice. Rates, terms, and eligibility can change, so confirm details with each provider.
