Holly Birch Photography

View Original

Funding Options For Starting A New Small Business

Starting a new small business takes more than a great idea. It takes money, but do not panic. There are many ways to fund your startup. Continue reading below to learn about possible funding options.

How To Get Started With Business Funding

One of the best places to start is with the Small Business Association(SBA). Though the federal government does not provide grants to small businesses, the SBA can help in other ways. They have valuable information on starting a business and maintaining daily operations.

SBA does provide some funding for specific businesses, including women-owned, businesses of military spouses, veteran-owned, minority-owned, and more. For those starting a business in a rural area, SBA can provide you with specific funding information for your business.

Types Of Funding Options

Now, that you reached out to the SBA, it is time to explore other funding options. First, take a close look at your finances. Are you financially able to fund your business? How about asking friends and family to help out?

A second option is to find outside investors. There are two common types of investors. One is an angel investor, and the other is a venture capitalist. An angel investor uses their own money to invest in a business. In return, they usually get a piece of the company.

Venture capitalists are a group of people who come together to provide funds for a startup. They, too, usually get part of the business. If you use an investor, be clear on the role they want to play in your company. Do you want someone else controlling your business?

Crowdfunding is another option for startups. Start a Kickstarter or a GoFundMe. To be successful at crowdfunding, you need to get your potential product out for people to see. A social media blitz will help to make your crowding campaign a success.

Grants are also an option. However, it may take time to research and write your proposal. The upside to a grant is you do not have to pay the money back.

The final option is a bank loan. Small business owners have two types of loans available. They are traditional loans and SBA loans.

How To Find The Right Loan For Your Business?

You have concluded that a loan may be the best option for you and your business, but how do you find the right loan? First, do your homework. Research loans and determine what qualifies are needed to secure the loans.

Next, reach out to a bank. The simple way to do that is to start with your bank. If you have a personal or business account with a bank, make an appointment to talk to their loan offer. They already have your account information and know what you can afford. Show up with questions and any information they requested you to bring.

If you do not have any accounts at a physical bank, it may be time to open a local business account. Now, it is time for some computer research. A simple search will bring up many different banks. Narrow down the banks that seem to offer you the best options. Some banks will allow you to set up virtual appointments or at least take a phone call. After speaking to several loan offers, you will have the information you need to decide what type of funding is best for your business.