So, you want to know how to finance a small business?
For a small business, there are many avenues you can wander down, if you’re seeking financing.
Now that we have your attention, here are 5 ways to finance your small business:
- SBA Loans. You can go to your local bank and ask about SBA
- backed loans. Different banks will have different criteria on the types of loan
- offered. Check out the SBA website for information and to find
- small business loans where you live.Family and Friends. This can be a great source of early
- funding without much of the formalities. But be careful– it becomes very hard
- to cut family and friends out of a business.Crowdfunding websites. Several websites exist that allow
- donors or investors to give to a project with the click of a button. Investor or
- donor funds are pooled together and given to the business.Banks. Loans and lines of credit are available from banks.
- For a new business with no history, a bank loan would be difficult to obtain.Bootstrapping. This is just a fancy way of saying “fund it
- yourself.” Many small business owners put their own money into the small
- business. This may come from savings, personal lines of credit or even home
- equity loans.
Places to avoid
Venture capitalists. If you’re trying to get a small business off the ground, it’s unlikely that you’ll get your initial source of funding from a VC. Don’t waste your time, especially if it’s your first business. Wait until you have something good going before you approach a VC.
Angel funders. Again, you won’t get your first round of funding from an angel investor if you’re a first-timer running a small business. You need to have a strong business in place and some history to show before you can pique the interest of an angel funder.
Related Resources:
- 7 great
- ways to finance a startup (CNN Money)Sources
- of Small Business Financing (FindLaw)Start-Up
- Financing (FindLaw)
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