Running your own small business is no easy feat. You have a responsibility to yourself, your family, and any employees you may hire. Still, such an endeavor can be worthwhile if you embrace your entrepreneurial spirit.
Before you start operations, though, it is likely that you are thinking about small business funding options. Well, the good news is that you have come to the right place by reading this article. Detailed below are ten worthwhile funding options for you to consider.
After all, you will want to do everything you can to stay ahead of your competitors in your local market, right? Consider the following statistic. As of the year 2015, there were over 30 million small businesses throughout the United States.
In other words, you need to ensure your initial funding sets you up for profitable, long-term success. Keep reading, then, to determine the ideal choices for you to fund your small business.
1. To Start, Think About How Much Is in Your Savings Account
One of the first things to think about is how much you can personally contribute to your small business. For instance, if you have built up substantial savings over the years, consider using some of them.
There is nothing wrong with using personal finances to get your entrepreneurial dream jumpstarted. At the same time, do not make the mistake of depleting your entire savings account. Instead, take a look at some of the following funding option.
2. Sell Something Else First
It is true that you want your small business to be a sophisticated endeavor. That means that when you are ready to launch its products or services, you are going all in.
Still, you can take some time to sell something smaller on the side to generate initial funding. For example, if you are developing a clothing line, start by selling branded jewelry. It is not your entire stock of merchandise, but it can get you started!
3. Use Your Home Equity As Collateral
Some small business owners decide to make a drastic decision to fund their products or services. They will make an arrangement with their bank to use their home equity as collateral.
In doing so, they will receive a line of credit for the value of their home. This line of credit can be a substantial amount, so business might be great in the beginning. If profits do not do so well, though, you run the risk of losing both your employment and your home.
4. Thanks to the Internet, Crowdsourcing Is an Option
You have seen crowdsourcing campaigns, like those of Kickstarter, right? Well, it is fortunate for you that using that resource is a great option for many small businesses starting out.
The way it works is you start by setting up a campaign goal that you will need to start your business. Then, you publish the campaign everywhere you can online to encourage people to contribute. Often, a small trinket or package is offered by the small business as an incentive.
If your campaign reaches its goal, you get to keep all of the crowdsourced funding. If you do not reach your minimum in the allotted time, however, you get nothing. The risk is low for this funding option.
5. Use Equipment Financing for an Industrial Business
If you are starting a small business that requires the use of machinery, financing might be your best option. As you build up profits over time, you will eventually be able to buy your own equipment.
6. Consider a Working Capital Loan
It is important that you take your small business seriously from the very beginning. That is one reason why a working capital loan can be the perfect idea for you. With this option, you can negotiate a renewable source of flexible funding for as long as you need it.
Not only is this option affordable, since it depends on the specific details of your business plan, you do not have to use collateral to maintain the loan. Read here for more information about how working capital loans may be your best bet for funding.
7. You Can Always Utilize Credit Card Lines
Using credit cards is not an ideal way to fund your small business. There are a ton of interest fees and maximum credit lines to consider. Still, they can be worthwhile for some of the smaller expenses you will have right off the bat.
8. If Applicable Consider Applying for a Grant
This process does not work for many small businesses. If you are starting a business in a research or science-based field, though, consider asking the government for a grant. In essence, if the government can eventually profit from your products or services, they might be interested in helping you out.
9. Use a Personal Loan from Your Bank
It is true that even experts recognize that small business lending throughout the country is in a good position. This reality was even true after the stock market crash in 2008.
Still, personal loans are an entirely separate option to consider. Rather than a small business loan, you will ask for this one directly through your bank.
10. Small Business Funding Options Can Include Asking Friends or Family Members
There is nothing wrong with asking for help! This tip is the last one for you to consider. You can even offer interested parties a portion of the company’s stock as an incentive, for example.
Start the Process To Fund Your Small Business Today
At this point in the article, you should have a pretty good idea of the small business funding options available to you. If you are dedicated and resourceful, your small business will start earning profits in no time. It is up to you, though, to ensure the initial operations have enough funding.
After all, you deserve the peace of mind that comes from knowing you are making the most of your small business. There is no need to cut corners when it comes to investing in your business and its future. That is why gaining the ideal type of initial funding is so crucial.
Do not be one of the many small businesses that do not last beyond a few years. It is understandable if the pressure to start a business seems overwhelming. It is true there are a lot of ins and outs to navigate concerning small businesses in today’s competitive world.
Well, maybe that is where we can help. We prioritize helping our client’s jumpstart their businesses and make their dreams come true.
That is why we offer affordable funding options for entrepreneurs like you. To start investing in your business’s financial security, we encourage you to check out our working capital loan application on our website today.
Combining a high level of personalized service with a cutting-edge lending platform, Formula Funding delivers an unparalleled banking alternative. We offer a fast and efficient option to get your business the critical funding it needs without the red tape. We work with all credit grades, tax liens, judgments, and charge-offs – something unheard of at a traditional bank. Since 2010 over 15,000 small business owners have used our funding sources to grow and expand.