Talk to Wise | 1-800-496-1056
Talk to Wise | 1-800-496-1056
Talk to Wise | 1-800-496-1056
Should You Raise Funding Through Investors or the SBA?
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Should You Raise Funding Through Investors or the SBA?

ByJoseph Ferriolo Last Updated on -

If you’re planning to grow your business in 2025, you’re likely facing one big question:

“Should I raise money through investors or apply for an SBA loan?“

Both paths offer capital, but the long-term consequences are very different — especially when it comes to control, cost, and risk.

At Wise Business Plans, we’ve helped over 15,000 clients build investor-grade and bank-ready plans. We know what each type of funder wants — and more importantly, what they don‘t tell you up front.

Here’s how to decide which route is right for you:

SBA Loan: Debt-Based, Lower-Cost Capital

SBA loans (like 7(a) or microloans) are government-backed and repayable over time. They’re ideal for:

  • Brick-and-mortar businesses
  • Franchise owners
  • Businesses with predictable revenue
  • Founders who want to retain full ownership

Pros:

  • You keep 100% equity
  • Low interest rates
  • Long repayment terms (5–25 years)
  • Predictable monthly payments

Cons:

  • Requires strong credit, collateral, and documentation
  • Slower approval process
  • Payments start immediately — even if revenue doesn’t

Investor Capital: Equity-Based, High-Impact Growth

Raising from angel investors or venture capitalists means giving up a percentage of your business in exchange for funding.

Best for:

  • Startups with high growth potential
  • Tech, SaaS, or disruptive products
  • Founders open to board oversight
  • Teams ready to scale fast

Pros:

  • No monthly payments
  • Strategic support and connections
  • Room to reinvest cash flow into growth

Cons:

  • You give up equity — possibly permanently
  • Investors often want a say in decisions
  • Long, competitive pitch process
  • Pressure to scale quickly (or exit)

So, Which Is Right for You?

Scenario Best Path
Need $50K–$1M for a proven local business
SBA Loan
Launching a tech startup with global scale
Investors
Want to keep control & grow steadily
SBA Loan
Okay giving up equity to move fast
Investors

Why It All Starts with the Right Business Plan

Whether you’re going to a bank or pitching investors, your business plan is the first thing they’ll evaluate. At Wise, we build:

  • Bank-Ready SBA Plans with cash flow analysis & repayment tables
  • Investor-Grade Plans with funding strategy, exit options & financial modeling
  • Hybrid Plans if you want to pursue both paths at different stages

Every plan is custom-written by MBAs based in the U.S. — no templates or AI fluff. Choose the right funding path with a detailed SBA business plan tailored for Small Business Administration loans.

Free Strategy Call: Find Out Which Funding Path Fits Your Business

Book a free 15-minute call with one of our funding consultants. We’ll help you:

  • Decide which funding option makes sense for your stage
  • Review your readiness for SBA or equity capital
  • Map out next steps (including timelines and documentation)

https://calendly.com/wisebusinessplans
Or call (800) 496-1056 to talk to a strategist today.

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