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How To Get Funding For a Product

Starting a beauty or wellness product business is an adventure in every sense of the word. It’s exciting to know that a product you create will be sent out into the world. The challenge for many startups is how to get funding for a product. Luckily, you can get the necessary financing and build your business in several ways.

Finding the best financing option is easier if you have a business plan that outlines your startup costs. Your business plan lets you and potential investors know what kind of funding is best for your project. Once you have a business plan in place, you can start deciding what kind of financing you need. 

Getting funding can be difficult no matter which type of financing you need, but no worries! You will just need to do a bit of homework to find the best option for your business plan. 

Why Getting Funding For A Product Is Difficult 

Finding an investor can be tricky when you are looking for funding for a product line. That is true whether you are looking for a loan, grant funding, or private investment from crowdfunding or a venture capital firm. Loans can be hard to get because they can be risky for banks or investors. Grants and private investments carry less risk but are highly competitive. 

Deciding which type of financing is best for you depends on how much funding you’ll need, how much time you have, and how much risk both you and your investors are willing to take.

How Do Most People Get Funding For a Product? 

There are typically two financing options out there for small businesses – debt financing or zero-debt financing. Each type has benefits and pitfalls, depending on both your business plan and your financial history. 

Debt financing includes traditional bank loans that can be very accessible, but only if you have good credit. A credit score below 680 is usually seen as too risky an investment by many banks. Another option that falls under this category is a secured personal loan. These loans often offer higher loan amounts at lower interest rates but require you to provide collateral (like a home mortgage) as security. 

Pros and Cons of Using Loans to Fund a Product

Traditional Business Loans


Banks are a great source for large business loans. The average loan amount from a large national bank is $593,000 compared to $146,000 from a small regional bank and $50,000 from online lenders. That makes a traditional bank loan a great funding source for companies that need significant startup funds.


Traditional bank loans will consider your credit score before deciding whether to lend your funding for a product. A score below 680 is often considered too risky for traditional bank investment. Also, interest rates tend to be higher with traditional loans. If you want to keep debt to a minimum, a traditional lender may not be the way to go. 

How to get funding for a product by researching best practices.

Personal Loans


Personal loans – especially secured personal loans, like a home equity or 401(k) loan – can be a quick and easy way to get money for your startup. You might also be able to get a larger loan at a lower rate than you would with a traditional business loan. 


Defaulting on your loan might cost you more than your personal credit, especially if you have a secured personal loan. Banks or online lenders could take anything from your personal savings to your car, depending on what you put up as collateral.  

Small Business Administration (SBA) Loans


SBA government loans have been a trusted source of small and large business loans since the 1950s. Because SBA loans are backed by the federal government, they have more than enough backing to leverage a broad range of loan options. Startups might find more flexible credit and loan repayment terms through the SBA than they would with a bank loan. 


You will find more loan options with the SBA than many banks, but a good credit history still counts. A startup might discover that an SBA loan has less competitive rates than a company that has been in business for a few years. Most importantly, defaulting on an SBA loan puts your property at risk of being seized by the government until the loan is paid. This is possible even if a startup declares bankruptcy.  

Business Line of Credit and Business Credit Cards


Getting a business line of credit or business credit card can be as easy as clicking “apply” on a website. And you don’t need a good credit history or years in business for approval by some companies. The corporate funding platform Fundbox offers a business line of credit of up to $150,000 to companies with as little as six months in business and a minimum credit score of 600. Business credit cards usually require a credit score of at least 690, but there are options for startups with less-than-stellar credit. The Ramp Card from Visa, for example, allows startups with a minimum credit score of 300 to draw credit from their bank account, making the credit limit higher than most other cards. 


Interest rates can be high for a business line of credit and business credit cards. You will pay less interest for a line of credit with a shorter repayment term, say six to 12 months. But you will have to turn a fast profit to meet those terms. Longer-term lines of credit can run from 8.99 percent for a 24-month line of credit with Fundbox to as high as 27 percent for an 18-month line of credit through Kabbage from American Express. Most business credit card interest rates range from 15-25 percent unless you have a no-interest card like Ramp, which requires you to pay off the entire card balance each month. That leaves little wiggle room for purchases you may need throughout the month. 

Expenses: How to get funding for a product.

Pros and Cons of Using Grants or Private Investment to Fund a Product

Zero-debt financing includes grants or private investment that isn’t tied to a credit score but is not as easily accessible as a loan. Small business grants are extremely competitive and carry tight application deadlines. Financing with angel investment or venture capital is a great option for a high-risk startup but usually requires you to show the value of your business up-front.

Small Business Grants 


The best thing about small business grants is that the grant funding doesn’t have to be repaid. You will have to apply for the funding and justify why you deserve the grant, but once you have it, you won’t have to worry about paying anyone back. Another great thing about small business grants is they are often tailored to your industry or demographic, making the competition for funds more about mission and less about money.


Because grant funding is debt-free, there is high demand for it. You will compete against thousands of other small businesses for limited funds. That will require you to do a lot of paperwork to show that your business fits the target demographic, so you’ll need to start on your grant application early to meet the required deadlines. 

Private Investors

Startups can also seek out private investors who are looking to back individuals they feel have a good chance at success. These financial backers include high-net-worth individuals called angel investors who take personal financial risk for a product they believe will give them a positive return on their investment. Private investors also include venture capital firms that lend large amounts of money for an equity stake. Venture capital associations including the SBA Small Business Investment Company (SBIC) Program and the ACA (Angel Capital Association) are available to help startups find the right private investor for their business plans. 


Angel investors and venture capital firms are willing to take risks on innovative products that beauty and wellness startups bring to market. Funding can far exceed any loan on the market today, totaling $1 million or more. Investment is in exchange for equity, so financing isn’t paid back as it would be with a loan. 

Private investment can lead to astronomical success for startups that can sell themselves as a good risk. Beauty entrepreneur Olamide Olowe just received $10 million in venture capital funding for her specialty skincare line Topicals, founded by Olowe in 2020. The venture-capital firm is CAVU, which has invested in top brands like Oatly and Beyond Meat. Olowe says her confidence is a big reason for her success with venture capitalists: 

“I figured out really quickly, at 23, when I first raised capital how to be sure of myself and speak about my business in a way that no one could poke holes through,” she said. “I go into every room. I know what I’m talking about.”

Two business entrepreneurs discussing finances and handling money for funding a product.


Private investment carries an equity stake, which means you must often give something up as part of the business arrangement. That might mean giving up as much as 75 percent of company ownership to your investors or other partners. And, because private investors are more likely to invest in a product that is near completion or already has a proven track record, you may have to exhaust other funding sources first. The Angel Capital Association recommends startups only work with accredited, trustworthy investors for these reasons. 

Additionally, funding is also often very hard to get. Olowe said, “It took me about two years and probably close to a hundred pitches to get funding”.

Creative Ways To Get Funding For A Product 

Funding a product can take any small business in more than one direction. But not every startup wants to take out a large loan or compete against hundreds of thousands of businesses for grant funding. Crowdfunding, microlending, and industry-specific grants (with a smaller pool of applicants) are three options startups might consider when looking for innovative funding for a product.


Crowdfunding allows the general public to invest in your product. Once you have selected a crowdfunding site like Indiegogo and Kickstarter, you can start building your “campaign,” a website that explains your product, why you believe in it, and what you are asking investors to contribute to make it a success.


Small businesses financed through crowdfunding don’t have to send in a long grant application, pay interest, or have a good credit score to run an online campaign. Successful campaigns raise an average of $7,000 that can go a long way toward getting your product out there. Crowdfunding also lets you build your name before your product ever hits the market. 


Crowdfunding isn’t magic. You will have to compete on a crowded site (pun intended) for what is a finite amount of investment. A successful campaign will mean building a broad network through social media and personal connection that will drive investors to your site. The more outside links to your crowdfund, the better your chance at success. 


Microloans are small loans that many small businesses use to finance their startups. The average microloan is $13,000, although some are as large as $50,000. 


Depending on your business plan, microloans can be a good, short-term way to fund your product while building your credit. The turnaround time for funding can be as short as two weeks compared to months for some SBA loans. Also, many borrowers can get a microloan with little to no collateral. 


The downside is that microloans can carry high interest rates of up to 20 percent and may require collateral – so be sure to shop around before you sign. Missing a payment will hurt your credit. The repayment terms are usually short, too, which means you could have as little as a year to repay the loan. 

How to get funding for a product by

Industry-Specific Grants

Government and private grant funds targeting a specific industry are a risk-free way to get startup funds without any risk. Applicants might find more specific grants to be less competitive than grants with a larger pool of potential candidates.

  • WomensNet offers monthly beauty and wellness business grants through its Amber Grant program
  • Swiftarc Beauty has created a $10 million Beauty Fund that is focused on female-led beauty and wellness brands. (Deadline to file TBD) 

Some Final Thoughts 

Any small business owner will tell you that financing is the scariest part of starting a new business. Researching your options for funding a product will help to get your business started on the right foot. Manageable debt, or even no debt, is possible depending on your financing needs and how much time you are willing to put into the financing process.

Once you have the funding you need to get started, you can put your creative power to work doing what you love – building an innovative and successful business.

Crème de Mint has specialized in beauty, food and supplement packaging design for more than 15 years. Our CPG branding agency knows how to create compelling, craveworthy designs that can help your brand stand out! Book a call today to chat with us about your packaging design.