No matter how big or small your company is, it will not thrive if you do not have enough funding. Like every business, you will need to spend on your resources, people, infrastructure or equipment. Add to that, if you are a startup, funding will be hard to find if you do not know where to look for it. Here are five funding options for a small business:
- Family and Friends
If your startup is a small business and if you have a close-knit social circle, then it is possible to get a private funding from the people you know personally. You can even offer them samples of your products to convince them into chipping in for your capital.
If your business has been thriving for a while and you think it will be more profitable to expand now, then you can get a fast cash loan from a reliable moneylender or a bank. Banks usually offer their business loans to businesses which are already doing well in the market for a year or two.
On the other hand, if you are a startup small business owner you can get a loan from a private lender. Private lenders may not require a collateral or a co-borrower but they will have to check on your creditworthiness.
- Venture Capital
Venture Capitalism is a business where a person will invest in a business that can surely make returns. The capitalists are risk-averse and therefore rarely invest in startups unless the startup has a product opportunity, proven management, and market opportunity.
- Angel Investors
Angel investors can be a great financing option for some small businesses. They are smaller investors that venture capitalists. You can find angel investors in some government agencies, business incubators, business development centers, or some organizations tied in the communities in your area.
Bootstrapping is a time-honored tradition. It is doing conventional and unconventional means to get some funding. If you have a great business idea, you can enter a contest open for startups. You can also use what you have right now. Bill Gates and Paul Allen immortalized the “garage” as there is where the multi-billion dollar Microsoft was born. If you are employed while you are starting up your small business, you can also use your income for a while.
Funding a business is no joke, but hard work can surely make it pay off.