They got some of their cash from Lonnegan himself & the other players in the train poker game. That was the secondary purpose of the poker game. The primary reason was to feed Lonnegan the tale and get him interested in getting even, but Gondorff also used the opportunity to steal Lonnegan's wallet AND fleece the other poker players out of some money.
Upon returning to Hooker after the card game, Hooker asks how it went and Gondorff responds "we've got some working money", while thowing down the wad of cash he won at the card table.
Also, for those grifters who saw The Sting as a huge money making opportunity ($500,000 would have been an enormous amount of money during the depression), they may have been willing to invest some of their own money in the endeavor. And don't forget that for many of the players involved the money was only a partial reason for the sting, they mostly wanted to get revenge.
As for the cost of running the sting, when Twist is renting the space to be used for the betting parlor, he pays the old man $250 to rent both the parlor room and the room across the street. In the same scene, Twist is told that to rent all the equipment for the store it will cost two grand, three grand if a full bar is included.
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