There are many sources of debt financing: banks, savings and loans, commercial finance companies and government agencies are most common.
State and local government have developed many programs in recent years to encourage the growth of small businesses. Family members, friends and associates are all potential sources, especially when the capital requirements are small.
Historically, it is extremely difficult to start a business with 100 percent debt. Private lenders and government loan programs often require 20 to 50 percent equity participation by the owner. The exact percentage depends on the project, the financial resources of the owners, the type of industry, the use of funds, and the financial institution’s general loan policy.