More Ambition Than Cash? Your Guide to the Business Funding Options Available
April 18, 2022
Starting a new business is exciting and full of possibilities. However, now that you have a great business idea, you’ll need some funding to lift your startup off the ground.
Most businesses require a relatively large amount of financing to grow and to be fully operational. If you don’t have tens of thousands of extra dollars lying around, there’s a good chance you will need to do some fundraising.
Luckily, many options are available for acquiring funds for your small business.
Small Business Loans
Small business loans are a fantastic resource for getting money to grow your start-up. Both traditional and marketplace loan options are available to would-be entrepreneurs looking for a fast and easy business loan.
Traditional lending institutions such as large banks will likely be looking for high credit scores and a successful business track record. If you face obstacles qualifying for a conventional business loan, try exploring options with a smaller bank, credit union, or alternative lending institution.
Small Business Grants
Small business grants are another option to consider when funding your business. Both the government and private organizations offer small business grant opportunities. Grants are a fantastic chance for your business to receive free money, not to mention the other support resources the grant may include.
If you’re interested in receiving a grant, reach out to your local commerce officials and any organizations interested in supporting small businesses.
One strategy for raising funds for your small business is reaching out through your personal network. Relatives and friends may be more likely to support your business than a large bank.
Your social network can also help you make professional connections that can help you develop your business. For instance, if your aunt hears that you’re opening a stationery store, she could introduce you to her friend that works in paper manufacturing.
A word of caution: loans between family and friends can cause conflict. Before making a business arrangement, make sure you set clear boundaries and expectations. The last thing you want is for your business ambitions to cause friction in your home and family life.
Using personal savings to fund your business is often called “bootstrapping.” This route is a risky but sometimes necessary choice. If your business fails, you could end up broke and in considerable debt.
Be discerning when you entangle your personal finances with your business finances, and never push your spending beyond what you can handle.
Start-ups have become increasingly popular in the last few decades, and many have been huge successes. As a result, organizations have an interest in partnering with and supporting aspiring entrepreneurs.
A start-up incubator provides a perfect co-working space for networking and sharing ideas with other business owners. The incubator will also provide you with mentorship and even funding.
There are many avenues for financing your small business start-up. Using a combination of a few financing strategies, such as loans, grants, and personal networking, your small business will flourish in no time.