10 Ways to Find Funding to Grow Your Small Business

by Josh Biggs in Tips on 17th February 2019

Entrepreneurs always come up with a new stack of ideas and powerful ways to implement their business ideas. It takes a lot to start a new business and grow the brand to profitability. Planning a business idea is easy but executing the idea into a reality is difficult. You must own complete responsibility of your business under any circumstances.

At a certain point every business starts looking for additional funding. Financing a business is always a challenging for small businesses. If you’re looking for funding to start your own business. Then, you are at the perfect spot. In this article, you can get brief information about business funding.

In order to expand the business, it’s necessary for you to opt for financial resources that can help to expand your business. There are two categories of fundings involved in the business such as debt and equity.

Debt – Debt funding is referred to as the amount of money that you borrow to execute your business plan. These funds can be used to implement the business activities.

Equity – Equity funding is mutual funding, it is the process of raising capital through selling the profits of your business.

As per the market insights, getting a loan is simple and easy with thinking capital. You can apply for the loan anywhere and anytime to get funds in your bank accounts within the duration of single day.

Following are the top 10 financing choices, choose the best funding option based on your small-business goals and requirements.

Bootstrapping – When you’re planning to raise money, bootstrap funding is probably one of the popular and inexpensive ways for a small and large entrepreneur. Without asking any help from others, you can pull yourself up. No equity problems will be encountered in your business because you borrow less money from the lender. Ultimately, you will be responsible for the profits and assets of your organization.

Self-Funding – Self-financing is an act of utilizing one’s own capital to issue funding for their own business. Most of the entrepreneurs fund their businesses all by themselves and doesn’t require funding backers. They make use of personal debt and sell assets if required to generate money for their business. Therefore, self-funding promotes the profitability of your business model.

Crowdfunding – The crowdfunding is the fastest growing source of finance for all types of business. It raises a small amount of money from the crowd. One of the best factors is, its ability to centralize and perfectly streamline your complete fundraising efforts. The investments in crowdfunding can be debt, equity or rewards-based.

Angel investors – Angel investors are people who are likely to invest money or private equity financing in small businesses. It is a better choice for new businesses with the potential to achieve maximum ROI. Angel investors may be individuals or a group of people, you can search online for your local angel investor.

Venture Capital – It is the process of investing money in small business at an initial stage of business. They basically target startup companies and invest up to a certain percentage. If you are planning for long term growth potentials, venture capital is the best choice to prefer. The main reason for choosing venture capital is that it generates maximum return on investment in early stages of business.

Small business lenders – Financing is an important part for expanding your business. If you’re planning to dive right into the competitive business world, the small business lender is the right choice for you. The popular small business lenders are JP Morgan, Wells Fargo, The Huntington National Bank and many more.

Credit Card Funding – Using credit card to fund your small business is a great idea. It enables to fund your account away faster than a bank transfer. Make sure you do not fall behind on your payments, that will make your credit score whacked. Currently, there are few lending companies offering startup business credit cards particularly vital for new organizations.

Equipment Funding – For small, medium and large scale organizations, growth depends on the equipment used for creating a product. Having a high standard equipment is important. When it comes to Equipment funding, it refers to a capital that you prefer to lease or purchase equipment. These type of loans are secured and doesn’t need a personal guarantee.

SBA Loans – If you are planning to start a business with low capital requirement, then SBA (Small Business Administration) loans is best. In general, SBA loans are targeted on small business. These loans will reduce the risk for lenders and also make it effective for startups to get their loans approved. There are also, Government-backed loans offered with low interest rates.

Friends and Family – It is obvious that friends and family members can stand as a backbone for your business. They can provide you with equity or debt funding. During the initial stage of business, everything looks good, as the things starts to fall apart be careful. Because of the loss of capital in the business can ruin the relationship. Make sure to maintain a strong relationship during every stage of your business.

The funding can be secured with a perfect business plan. There are many options available for funding that can grow your small business. Both equity and debt funding go hand by hand to grow your business. The advantage of preferring debt funding is that the lender has no control to take an equity position in your company.

Categories: Tips