Finding small business funding is one of the survival skills needed for small business success. Whether you're a start up or growing business, learning the basics of raising capital will go a long way to ensure you stay in business.
There are a variety of money sources for small business including grants, small business loans, SBA loans, angel investors and much more.
Debt & Equity Financing: Debt and equity financing are two different financial strategies: Taking on debt means borrowing money for your business, whereas gaining equity entails injecting your own or other stakeholders’ cash into your company.
Small Business Grants: Small business grants are often a hot topic among entrepreneurs with limited funds and access to capital. There are many misconceptions when it comes to grants for small business.
First Time Small Business Loan: The best place to start when it comes to finding your first small business loan or credit is not with your banker, accountant or lawyer but with you. The business is the owner so your personal credit history is an important aspect in getting a small business loan.
Small Business Loans Qualification: When banks start to tighten lending to the small business market, they look to reduce the risk of issuing a small business loan. To qualify, a small business must understand the risk assessment processes bankers use in loan determinations. Bankers making a loan approval will review a small business in the context of the 5 C's for small business loans and credit.
Find an Angel Investor: On a wing and a prayer, an angel investor can help take your company to the next level in one swoop. At what time in your company's lifecycle are angel investors a best option?
SBA Loans: The Small Business Administration helps facilitate loans for small businesses, but it doesn't give grants, nor does it issue startup SBA loans directly. Instead, the SBA acts as a guarantor for small businesses borrowing from traditional lenders. If you think you might need a backer to secure funding, startup SBA loan programs could help your small business find its footing.
For the start up business, contrary to popular belief, most start-ups aren't funded by grants, angel investors, or banks. So don't get discouraged if you don't find the money you need initially. Your seed money will come from your personal savings, friends, family, and any other creative means.