What it is
Paying from cash the business already has: profits you've kept in the business (retained earnings) or savings you put in. It's how many small businesses pay for most things.
Putting in part of a project's cost yourself also matters when you borrow for the rest: lenders count what you've put in, and you borrow less.
What it really costs per year
There's no interest, no fee and no paperwork. The real cost is what the cash would otherwise do: at the least, earn about 4% a year in Treasury bills (November 2026), and more if it would have funded something that earns more.
The bigger cost is what it can't do once it's spent: cover a slow month, a broken freezer or a supplier who wants paying up front. Being caught short later usually means fast, expensive money, so compare a loan's yearly cost with that, not with 0%.
How fast the money comes
Immediately.
Who qualifies
- Anyone with cash beyond what the business needs to run.
- The typical small business holds only about 27 days of cash (JPMorgan Chase Institute, 2016), so many advisers suggest keeping a few months of fixed costs (rent, payroll, loan payments) before spending the rest. That's a rule of thumb, not a rule.
- When you borrow for the rest of a project, what you put in counts: SBA loans to start-ups and to buy a business need at least 10% from the owners, documented.
Where it breaks
- When it drains the reserve: the next emergency then gets paid for with the most expensive money there is.
- When the project is big and long-lived: paying all cash for a buildout ties up money a cheaper long-term loan could have spread out.
- When personal savings go in without a record: write down whether it's a loan to the business or more ownership, for taxes and for any later lender.
Compare with
- Friends and family: yearly cost about 0–5%, money in days to weeks.
- Bank loans and lines of credit: yearly cost about 7–11%, money in 2–8 weeks.
- Business credit cards and 0% offers: yearly cost about 13–29%, money in days to 2 weeks.