Small Business Funding Options for Business Owners

It’s one thing to have a business idea. It’s another thing altogether to bring it to fruition…And it’s another step up from there to run a successful business over time.

Indeed, two-thirds of startups fail within the first 10 years.

Of the many factors that play a role at each stage, though, small business funding is arguably the most important. Cash really is king! Unfortunately, when you’re new to the game, knowing how to get your hands on it isn’t easy.

Are you hoping to raise enough capital to get your operation off the ground or take it to the next level? Would you like some expert insights on how to make it happen?

Well, you’re in the right place. Today we’re going through a selection of effective ways to raise money for your small business. Check them out!

Traditional Lenders

Throughout history, the primary source of small business funding for most entrepreneurs was the bank! And although there are more options in 2021 than ever before (many of which we’ll discuss in this article), these traditional lenders are still a viable port of call. For example, they might be able to offer you term loans and/or open a line of credit for you.

The only downside? This form of funding’s usually restricted to established businesses. In other words, your brand new operation may not qualify if you lack enough assets to use as collateral and/or don’t have a strong credit history.

In these cases, locally-owned banks are often the better option. Why? Because their interest in the community’s development might be a sufficient incentive to loan you the money!

Online Lenders

Internet lenders have skyrocketed in popularity in recent years. And it isn’t hard to understand why! These companies a) pay less attention to credit scores and b) can supply funding in record time.

That makes them an attractive option for anybody with subpar credit who wants/needs swift access to capital. Be careful, though! You can expect to pay higher interest rates on these small business loans in return for the ease and convenience involved.

Look for reputable online lenders, such as Your FundingTree, who aren’t just loan sharks in disguise. Do some digging for more information from Your FundingTree, or other trustworthy lenders of this nature, to ensure this funding option makes sense for your situation.

Loans/Investment from Loved Ones

Do you have friends, family, or acquaintances who might be willing to invest in your business? If so, this could be the best small business funding option at your disposal- especially in the early days. Indeed, even global brands (such as Amazon), started out with a loan of this nature.

There’s a multitude of reasons why that’s the case. First and foremost, though, it’s the cheapest debt you’ll ever take on!

Because your loved ones want you to succeed, they don’t care about making a profit, being paid interest and dividends over time, or receiving stock options. Instead, you repay nothing more than the loan principal, which is unheard of when you seek funding through “official” channels.

Crowdfunding

Crowdfunding’s another incredibly popular source of raising start-up capital. This time, though, the goal isn’t to receive a large sum of it from one or two key sources. You’re trying to leverage the internet to bring your idea to the masses.

If it’s compelling enough, people from all over the world will give small sums of cash to bring the idea to life.

Most business owners try to sweeten the deal by offering rewards to anyone who invests (such as free products, t-shirts, or insider access, and so on). By the end of a successful campaign, you might have hundreds (or thousands) of micro-investments that add up to the full amount you need.

A number of crowdfunding sites exist nowadays, including Kickstarter, GoFundMe, and Indiegogo. Start by creating a profile, setting up the campaign, and then marketing it as aggressively as possible!

Angel Investors

“Angel investor” is the fancy term given to affluent individuals who invest in promising startups (in the hope of making a sizeable return). For anyone with a great idea, a solid business plan, proof their product/service works, and a winning attitude, these investors could be another ideal source of small business funding. Why?

Because, not only can you acquire a working capital loan, for instance, but you can also tap into the expertise of the angel investor in question. Indeed, many of these guys and gals were/are business owners in their own right. If they like your idea enough to invest, then they may take on the role of an advisor/mentor as well.

It’s a win-win. You receive the capital and benefit from their experience, connections, and industry awareness; they increase the chance of seeing a sizeable return.

Business Grants

As you can imagine, the best kind of startup capital is that which you don’t have to pay back! And that’s exactly what you get if you’re awarded a small business grant. Whether you apply to a government agency, a corporation, or a specific non-profit, you get free money to put toward the business.

There are two things to keep in mind here, though:

First, small business grants are almost exclusively reserved for specific types of business owners (such as veterans or minorities). Second, they’re in such high demand that getting your hands on one is no mean feat! Expect endless paperwork, lots of applications, and endless competition.

Time to Organize Your Small Business Funding

Have you had an amazing business idea that you’re determined to bring to fruition? Well, sooner or later, when you’re savings have worn thin and you’re ready to take the next step, acquiring small business funding will be essential.

With any luck, the ideas in this article will help you do it! Whether you use one or all of them, put them into action and it shouldn’t be long before you have access to all the capital you require. If you’re hungry for more information on this crucial topic, search ‘funding’ on the website now.