Your Own Money
Yes, you will most likely need to invest some of your own hard earned cash for your start-up or for your business expansion. Usually it's a smaller percentage of the overall funding requirement, but it all depends on the size of the project and the size of the financial requirements. A good starting point would be to set aside your own savings that would equate to 10-25% of the project costs. It will also depend on what the lenders or other agencies require, and what other sources will round off the full financing package.
Business loans are the most common financial source for business projects. Loans are usually at a higher percentage rate as the risk associated with business loans is higher than with car and home loans. Most commercial lenders will require a detailed business plan, will conduct a credit check on you, and may ensure that you have collateral or security to back the loan.
If you do some homework and research, you will find that you may be eligible for business grants in the US and in Canada. Grants usually exist in two formats - repayable and non-repayable. Repayable grants involve the gradual repayment of a grant over a period of time. You do not have to repay a grant from a non-repayable grant program. However, keep in mind that each program will have terms and conditions, and in most cases if you don't stick to the terms and conditions, those grants could become repayable. In this current economic climate, it has become harder and harder to acquire grants, and each program has become highly accountable. If you are privileged to be a recipient of a grant, it is worth your while to follow through with your commitments and adhere to the terms and conditions.
You could also obtain other sources of funds for your business through a small line of credit, loans from friends or family, investors, or from credit cards. Be extremely cautious with lending sources or credit companies that carry high interest rate terms on the principle amount - these sources would be the absolute last resources for funding your business.