• If you need startup funding for your side hustle, you can look for grants and interest-free loans in your community.
• You can also save the money to fund your side hustle using tools like Payactiv’s Goal-Based Savings¹.
• Don’t forget to cut your expenses where you can. For example, you can utilize free tax services like VITA or IRS Free File instead of paying someone to file your self-employment taxes.

Starting a side hustle can be a fantastic way to earn extra cash. However, sometimes it takes money to make money. Even the most budget-friendly side hustles may have upfront investment costs.

Luckily, there are ways to get these initial financial needs met. Here are some of the best tools and resources for starting a side hustle.

Apply for Grants

While many new, small businesses fail, that doesn’t mean you shouldn’t try to make your dream hustle come to life. That said, you should be careful about borrowing money when you’re unsure you’ll have the revenue to repay it.

This is where grants can be beneficial. Grants are money you never have to repay, so they’re ideal for side hustlers starting a small business.

Once you have a great business idea, take the time to write a solid business plan and apply for business grants to reduce your initial financial output. If you need help writing a business plan, the Small Business Administration has an informative guide you can reference.

Look for Interest-Free Loans in Your Community

Most business loans have interest charges, making them particularly risky when you’re starting your new side hustle. If you have a great business plan and are coming up empty on grants, you can look for interest-free loans in your community.

One resource you might want to research is your local Jewish Free Loan Association. Rules and underwriting requirements vary by chapter, but many chapters lend money on a non-sectarian basis. This means loans are open to everyone in the local community. 

You will likely need a decent credit score to qualify. If you do qualify, these loans come with 0% interest.

TIP: If you’re unhappy with your credit score, consult a KOFE financial counselor to learn how to improve it. This service is free to Payactiv members.

Automate Your Savings

What happens if you can’t find any grants and don’t qualify for an interest-free loan? Another way to get the startup funding you need for your side hustle is to save it yourself. 

You can use Payactiv’s Goal-Based Savings feature to plan your savings journey and automate transfers to your set-aside purse. Automating your savings makes it much more likely that you’ll actually put money aside for your goals since you won’t have to think about it.

Access Free Tax Services

When you have a side hustle, you probably won’t get a W-2 form with your taxes automatically withheld from a paycheck. Instead, you’ll be responsible for setting aside that tax money yourself.

Side hustles are usually taxed as self-employment income, and self-employment taxes can be complicated. Luckily, some programs allow you to get extra help filing your tax forms if you fall below a certain income level.

For the tax filing season in Spring 2024, these were the income limits: 

• VITA: $64,000, but they won’t turn you away if you’re a little over. VITA is an in-person tax filing service, and income limits don’t apply if you have limited English-speaking skills or are disabled. People in those categories qualify for free assistance from VITA.
• IRS Free File: $79,000. Free File gives you access to programs like TaxAct and TaxSlayer. If your side hustle does so well that you no longer qualify for Free File, you can save $15 on TurboTax’s regularly-priced packages as a Payactiv member, though your base price will be a little higher with self-employment tax forms. 

Final Word

If you can figure out a lucrative side hustle that won’t have high startup costs, go for it! Just remember that resources are available if you need a little money upfront to invest in yourself. You can even find tools that can help in your Payactiv app².

_{¹ Goal-based saving is a set-aside account, and you will not receive interest or other earnings on the funds within the goal-based account.}

_{² Standard data rates from your wireless service provider may apply.}

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