How To Finance A New Business In The US?

Starting a business can be exciting as it presents an opportunity for growth and wealth, especially in the United States. However, starting a business can also be stressful as well as very expensive. You must be clear about getting the required capital to start a new business and plan accordingly. You need to first ask yourself if you are going to self-finance or look for investors.

If you are an NRI or a visa holder, you may wonder whether you can open a business in the US or not. To clear the confusion, there is no need for a visa to register or purchase a business in America. However, If you are an H-1B visa holder, you can easily open a business but you have to meet certain terms and conditions.

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Here are some guidelines you must adhere to if you are an H-1B visa holder and want to start a business:

You cannot open a company for the sole purpose of holding an H-1B visa.

You have to hire people, including yourself.

Your company requires you to prove your employer-employee relationship.

Your business needs to have a separate seat of power. This can be a board of directors or a single director. The directors should be able to recruit and fire any employee from the company, including you.

As a requirement of the H-1B visa, you must have a bachelor’s degree or a higher degree in the required field.

Once you discover that you are eligible to open a business, you can think about funding your business.

The cost involved in opening a business

Well, starting a business is very expensive. That is why many small businesses often fail. You must do your research well to avoid this pitfall.

First, you need to ensure your estimated costs and income are accurate. Your anticipations need to match the reality of the situation as close as possible. But don’t use generic estimates provided by people who lack expertise in the field.

As a rule of thumb, most microbusinesses cost about $3000 to start, wherein most home-based franchises cost $2000 to $5000. However, it depends on the type of business you tend to open. You must have enough capital to cover six month’s fixed costs.

Ways to Fund a New Business in the US


Utilising your savings is the most available and easiest way to finance a small business. Your savings could come from a previous investment, a family inheritance or other assets. Spending cash demonstrates your commitment towards your business to potential investors and customers.

Personal Loans

You can seek personal loans from friends or family members. You can secure a better interest rate from a friend than a bank, especially if your credit score is not good.

To prevent problems in the future, you should treat this the same way you would a bank loan. But before that, ensure the terms of the loan and the repayment agreements are written down and both parties agree to the same. Some online and other new lenders also provide certain types of personal loans that can help you start a new business.

Venture Capital and Angel Investors

One of the ways to get other people to help finance your new business is venture capital and angel investment. Wherein venture capital tends to be an investment company, an angel investor is an individual investor. You need to have a good business plan and a workable sales pitch to attract venture capital firms or angel investors. It is an exclusive and competitive way to raise funds. The most attractive businesses for such kinds of investors are high-growth companies that are already profitable with a good cash flow. Investors typically fund businesses through loans and equity.

So, these are some ways you can raise money to fund a new business in the US.

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