Banks aren’t always the easiest place to get financing, especially if you’re just starting out as a small business owner. In fact, according to the National Small Business Association, fewer than one in four small businesses receive bank loans, which could be due to stricter lending standards after the 2008 financial crisis or simply because banks are looking for larger loans that will earn them more interest. Thankfully, there are plenty of other options available to help small businesses find affordable financing that suits their needs and budget. Here are 7 different financing options for small businesses.
1) The Small Business Administration
The Small Business Administration is one option you can look into if you’re having trouble getting a traditional loan. While it may not always be the best fit, this federal agency’s low-interest loans can help you manage unexpected costs, seize opportunities that might otherwise pass you by, and succeed in the long run. Be sure to apply early on because the program gets tougher to qualify for as time goes on! The National Association of Women Business Owners has offered women entrepreneurs angel investors and links to several loans available from many organizations like woman-owned or minority-owned banks to promote success with their business ventures.
2) Friends and Family
Raising money from friends and family can be appealing as they know your business better than anyone else, but this method may also expose you to more debt, as they’ll expect to be paid back in the future. With this type of investment, there is also the risk that personal dynamics between friends or family members may impact their willingness to help out. So tread carefully!
If you’ve tried Friends and Family funding and it didn’t work out, don’t give up just yet! There are many different ways to raise funds for your business!
3) Government Grants
If you’re looking to grow your business without the help of the bank, here’s an option that could save you some time and money. Several governmental agencies offer loans or grants to eligible companies, which might make all the difference in terms of getting your business on its feet quickly and easily. Some sites that can help match up potential grant-funded opportunities with small businesses include ZINC and Grants.gov, which was created by the U.S. government with federal grant opportunities at its fingertips—that is, as long as you qualify and have one or more clean audits behind you.
4) Alternative Financing Options
Have you heard of Angel Investors? Angel investors are individuals who invest in small startups and emerging growth companies with the expectation of significant returns on their investments. Unlike venture capitalists, angel investors invest their own money and frequently offer mentorship or coaching to help the company grow and achieve their desired financial goals. They can provide funding for anything from equipment purchases, to hiring staff, launching marketing campaigns, acquiring a new business, or buying out an existing business. Find them by networking at events, through acquaintances, or by posting on sites like AngelList and EntrepreneurList. These investor profiles usually include relevant experience as well as what they expect of you and how they want you to raise the funds – so be sure you know what kind of investor is right for your needs before reaching out.
5) Equity Funding Options
Most startups are happy to have found seed funding, meaning they had the capital to keep themselves afloat in the very beginning stages of their business. Seed funding typically ranges from $1 million to $2 million, but it can vary depending on the type of industry and how established the business is. If you’re thinking about starting a new company and want to pursue equity funding as an option, here’s what you need to know about different types of equity investments
6) Traditional Lending Options
Getting your first business loan can be confusing, with many different sources and types of loans available. While it’s not an apples-to-apples comparison, traditional lending institutions like banks will use your company’s net worth to determine what kind of credit line you qualify for.
7) How to Get Back On Track If Your Business Gets Off Track
Having a credit card to use only for business expenses can be an easy way to keep track of your spending and separate personal from business obligations. Bank loans should not be the first option when looking for outside capital, so it’s worth exploring non-traditional methods before committing to one that could have hefty long-term consequences on your personal finances. Grants and crowdsourcing campaigns can also provide funding, but there is typically no money upfront with these opportunities; if you need cash flow quickly in order to keep operating then this may not be the best route to take. The most important thing is to research all of your options carefully and determine which will work best given your current circumstances!
Get what you need for your clients
Any business growth can be severely hindered by the lack of cash flow. Merchants rely on the professionals at Waterview Capital when they require urgent funding to support their business. We’ll work with you to identify the ideal same-day funding option to propel you and your clients toward success. Waterview Captial is backed by years of company funding expertise.
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When merchants need fast funding to help their businesses grow, the experts at WaterviewCap.com are ready to help. We offer same-day funding to provide ISOs the tools they need to help their clients succeed!
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