The customers, the marketing, the cybersecurity, the nuanced coordination, it’s all part of running a business. When you’re Apple or Cisco, you’ve got the advantage of a huge global team and more, but as a small business, you will likely find that you’ll need quite a bit of ingenuity and innovative thinking to get those wheels turning the way you envision. Funding is also a major hurdle for small businesses. Finding solutions to push your business forward without breaking the bank is crucial. Here are some ways you can fund a small business.
Loans are by far one of the more popular options when it comes to funding a business. It allows small businesses access to more capital and fixed assets. Depending on the needs of a business, a micro-loan could be the answer. And there are plenty of alternative loans for business available. Loans typically have a start and end date, interest and penalties, and they must be repaid. Keep in mind that the sooner it gets paid off, the less you pay, unless there is a penalty for paying off the loan early. Just be sure that you understand the terms of the loan, as some can only be applied to specific things.
Grants are attractive to most, because they don’t have to be repaid. However, the path to receiving a grant is typically a bit more involved. Every grant is different and every application process is different. Some grants require grant writing, while others require that you make a video to apply. There are tons of grants available, so do a thorough Internet search and make sure you understand the terms and conditions of the grant. Like some loans, grants will require a business to put the funds to specific uses. Expect a lot of competition in the grant space. Everyone loves free money.
Donations are just as good as grants, and don’t have application windows, deadlines and eligibility requirements. Crowdfunding allows a small business to reach out directly to individuals who are looking for a business to support. Taking this path doesn’t guarantee you free money. Sometimes the lenders will come to you, other times, you’ll have to give something to donors in exchange for their monetary support. The crowdfunding landscape may seem a bit saturated, but having a well produced description and ask and putting it in the right spaces can get some pretty astounding results.
If you’ve ever watched Shark Tank, then you know just how instrumental angel money can be to a small business. An angel investor typically invests their own money into a startup or small business in exchange for a percentage of the business. This means that when the small business does well, so do the angel investors. These individuals have a lot to gain by helping you succeed. And best of all, there’s usually no repayment required.
Many small businesses choose this option because it’s easy, but it’s not always feasible. Using your own savings and investing profits back into the business are just two ways to make this work, however, reaching out to family and friends is also helpful. You’ll be able to retain complete control over your business and possibly avoid unwanted debt.
There’s no shortage of ways to fund a business. Some have a lot of hurdles to jump, while others are more streamlined. Consider your options and do as exhaustive of an Internet search as you can to give your business the best possible odds of being awarded the funding that will move you in the direction that you want to go.