Getting Money For Your Small Business
Starting a small business can be both exciting and challenging. Financing usually falls under the challenging category. Fortunately, there are a number of reasonable ways to finance your endeavors.
One common way to finance your business is through yourself. Careful planning can allow you to build a savings account to back your trade. This route can avoid the stress of borrowing money and enduring interest rates. Although convenient, this could require you to sell assets to gain enough money. Friends and family can also be a source of funding. They know you and can best understand your vision, but don’t let money be a reason to cause any issues.
Another way of funding is with business credit cards. These lines of credit usually require a low minimum payment to accommodate your cash flow. But be wary – running up business credit cards can be harmful to your credit score and bury you in interest rates.
If you feel confident in the growth of your small business, try gaining angel investors to bankroll your work. If investors feel there is potential, they may be willing to invest with a certain amount of return on their investment. Angel investors with experience can also provide insight into the business world and offer advice.
If your field is involved in scientific research, you may be qualified for a Small Business Innovation Research (SBIR) grant from the government. Grants are a convenient source of free money, but read the fine print and understand if there will be any changes in intellectual property ownership. Another source of free money is competitions in your craft. Winning a contest can lead to a handsome payout.
Crowdfunding gives you the opportunity to set a funding goal and pool small investments from many people. In return, you offer contributors a share of the company or a future product. Don’t set your goal too high though; some sites don’t allow you to collect any money if you don’t reach the preset goal.
Bank loans can be difficult but rewarding to get. The loan size could range from $50,000 to millions of dollars. The best way to land a bank loan is with a strong business model. Lenders want to see profitable projections before investing. If you need a quick loan, online lending might be the way to go. Applications for loans can take less than an hour, and the lender can approve them within days. Be careful of high APRs, though.
Now do some research, find the best option for your small business and go fund your dreams!