Mar 25, 2025

Question of the Day: What source of funding is used most often to start new businesses?

Find out how most new businesses get their funding. 

Answer: 84%

84% of businesses use personal or family savings to get started.

Questions:

  1. The majority of businesses use personal or family savings as a funding source. How might that affect which businesses get launched?
  2. What percentage of businesses use a business loan for funding?
  3. What is one piece of important information that is NOT included in the chart of funding sources?
  4. Access to wealth and credit is inequitable. How might that impact the business world?

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

 

Behind the Numbers (altLINE):

"Personal or family savings is the most common source of business startup capital, according to Census Bureau data. The benefits of this method are clear: You’re using existing equity to launch a business rather than taking on debt, so you won’t owe interest or have to stress about repayment.

Unfortunately, most Americans don’t have significant savings that can be used for this purpose, and this is even more true for minority communities. The average American’s savings account balance is $4,500, and 42% of Americans have less than $1,000 in a savings account. There’s also a significant gap in average savings balances based on gender, race, and education level."


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NGPF's Entrepreneurship mini-unit will give you lots of tools to get your students thinking like innovators and problem solvers!

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About the Author

Kathryn Dawson

Kathryn (she/her) is excited to join the NGPF team after 9 years of experience in education as a mentor, tutor, and special education teacher. She is a graduate of Cornell University with a degree in policy analysis and management and has a master's degree in education from Brooklyn College. Kathryn is looking forward to bringing her passion for accessibility and educational justice into curriculum design at NGPF. During her free time, Kathryn loves embarking on cooking projects, walking around her Seattle neighborhood with her dog, or lounging in a hammock with a book.

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