When it comes to getting a small business off of the ground, you need more than a good idea, sound business acumen, and entrepreneurial drive. Indeed, you also require a source of financing in order to make your dreams a reality. Unfortunately, obtaining the money you need to run a successful operation might not be as easy as making an appointment to see the manager at your bank, explaining your situation, and getting access to all of the funds you want. There’s a lot of competition for such funds, and so getting a bank loan isn’t a sure thing.
That’s why you need to mull over your financing options well before you launch your small business. Depending on what you’re looking for, you might favor some options over others; but you should consider what’s available so that you can make an educated decision. So what follows is a look at 6 financing options that can help you launch and sustain your small business.
- Small Business Loan: One option is to apply for a small business loan at your local bank or credit union. You should shop around for the best terms and interest rates as well as enquire about the various types of loans available to help your startup get off of the ground and move forward. One tip: Your odds of getting the small business loan you need will be better at a small financial services institution than it will at a large one.
- Online Lending: If you’re looking for financing, another option would be online lenders. Unlike traditional small business loan providers like banks and credit unions that might take a while before they let you know if you qualify, online lenders are known for speeding up the process. For instance, it might only take you 60 minutes or so to complete the application, and any funds you qualify will likely be available to you within days of your approval.
- Strategic Partnerships: If you’re not interested in pursuing a small business loan, then you should consider bringing aboard one or more strategic partners. Finding the right partners can net you not only the financial backing you need, but also the strategic counsel you require to take your business from startup to established player. And if your strategic partners are well known or have a good track record, that can give you instant credibility as well as a leg up on the competition.
- Angel Investors: Angel investors usually invest in companies during the startup phase and typically look for a return on investment in the 20% to 25% range. If you happen to attract an angel investor, you will likely be able to tap him or her for strategic advice.
- Crowdfunding: Don’t underestimate the value of crowdfunding. While it’s not for everyone, you can potentially raise the financing you need if you launch a fundraising campaign on crowdfunding platforms such as Indiegogo and Kickstarter. A great idea and solid campaign could be all that stand between you and the financing you need.
- Working Capital Loan: There are various reasons why a working capital loan might be just what you need for your small business. One of the reasons is that a working capital loan represents a great way to move your business forward. Whether you need to fund expansion, marketing, or anything else, a working capital loan can give you the funds to accomplish your small business goals.
So there you have it…6 financing options for your small business. Depending on what you want to accomplish, you might favor some options over others, but knowing what’s available will give you the tools to find the financing that you need to take your small business to the next level.