Getting Funding as a Freelancer: A Guide

Getting Funding as a Freelancer: A Guide

Can You Get Business Funding as a Freelancer?

The rise of freelance workers has grown significantly over the last few years. The amount of full-time freelancers jumped from 28% in 2019, to 36% in 2020. This is equivalent to about 59 million working Americans freelancing full time. Because of these rises in full-time freelancing, many freelancers may be in need of funding to build their business and grow their job opportunities.

However, freelancers may have some trouble getting traditional business loans. This is usually because freelancing is seen as more of a risk to banks than more traditional forms of employment. Some of the perks of freelancing, such as increased freedom and determining your own workload, can be precisely what makes it harder to get a business loan.


As a freelancer, you will likely have to do significant research and find the right lender that meets both your financial and business needs. You may also have to provide more paperwork in order to prove that you have a steady income. This could include bank statements, written invoices, and even future contracts.

How Freelancing Impacts Your Finances

Freelancing can be your side gig or your full-time job, depending on your goals, financial needs, and other priorities. Some people decide to freelance in order to increase their flexibility to attend to other priorities, like childcare. Others enjoy the ability to work remotely and set their own hours. How your freelance business is structured will likely impact not just your earning power, but also your loan opportunities.

For example, a seasonal freelance business, such as hanging Christmas lights on homes during the holiday season, will be harder to get a business loan for than a freelancer who works all year round. This is because it’s much harder to prove to the lender that you can repay the loan, especially if this is your only source of income.

Alternative Funding Options

Business loans aren’t your only option for funding as a freelancer. If you’re having trouble securing a business loan, you may want to seek alternative funding options. There are several options available to you depending on your situation, both in the form of different loan types as well as other funding types.

Personal Loans


A personal loan can be a financing option for freelancers who are either just starting or freelancing part-time. Your eligibility for these loans is based on not just your income, but any assets, including cars and property, that you have. This may make it easier for you to get approved.

However, you need to be wary. Some personal loans may come with high interest rates, or other hidden fees and penalties. You’ll still want to do your research to make sure you’re getting the best loan for your circumstances.

Lines of Credit


A line of credit, either a personal or business line, is another option freelancers may use for expenses. Getting a credit card can be incredibly beneficial to your credit score if you know how to use it properly. It’s important to remember that a line of credit is revolving debt — not free money. You should expect to have to pay back any expenses that you incur, not just the minimum payments, to keep yourself financially healthy.

The kind of credit you’re eligible for will depend on your credit rating. In the case of freelancers, this is most likely to be your personal credit. If you have bad or no credit, you may look into getting a secured credit card.

Alternative Lenders

If you’re not having luck with traditional lending institutions like banks or credit unions, then you might find more success with alternative lenders. Alternative lenders are typically online private companies offering loans, lines of credit, and other financing solutions.

These can be a great option if you’re not able to secure a loan with a bank, however, you’ll want to be aware that these lenders often have high interest rates, offer shorter-term loans, and may require more frequent payments. However, they offer loans with fewer eligibility requirements. Biz2Credit and BlueVine are two popular alternative lenders.


A microloan is typically a smaller loan, specifically for small businesses and entrepreneurs. In 1992, the American Small Business Association began the microloan program as a way to help start-ups and small business owners grow. These loans can be anywhere between $100 to up to $50,000, which makes them perfect for freelancers in need of new equipment, travel funds, and money for other smaller purchases.


Crowdfunding can be a good option for financing specific projects. For example, you may be able to crowdfund a short film. Platforms like Indiegogo and Kickstarter allow creators to post projects with specific goals and end dates. Before partnering with these platforms, you’ll want to carefully read the terms and conditions, as this will tell you any percentage the platform keeps, as well as what happens if your goal is not met within your timeline.


There are several national and regional grants available to freelancers, particularly those who work in the arts. These grants can cover the cost of equipment, raw materials, time off from your primary job, and even travel expenses to industry events.

Several grant programs have been kickstarted since the beginning of COVID-19 to help freelancers who can no longer get work, such as the freelancer’s relief fund. To find grants you may be eligible for, you can check with your freelancers’ union, or look online.

Invoice Financing

Invoice financing is another way to get financing for your freelance business. This is the process of borrowing capital based on the outstanding invoices you have, or in layman's terms, the money that is owed to you. This is a kind of revolving debt that can work well if you either need a small amount of capital, or you have a large number of outstanding invoices to borrow against.

A word of caution for this kind of financing — you’re still required to pay back what you borrow, even if you never get your invoices paid. So be cautious when you borrow this way, and be diligent about pursuing payment.

As you can see, there are several ways that you can pursue financing for your freelance business. Several factors influence your eligibility to get a traditional business loan, but you don’t have to panic if none of these are in your favor.

About The Author

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TJ Porter

Freelance Personal Finance Writer

TJ Porter is a Boston-based freelance writer who specializes in bank accounts, credit, and credit cards. He’s written for Bankrate, Credit Karma, MoneyCrashers, DollarSprout and My Bank Tracker, among others. In his spare time, TJ enjoys cooking, soccer, reading, and video games. You can connect with him on his website,