There is no single approach to financing. Apart from each company with individual financing needs, each financing option differs in terms of availability, conditions, financing amounts and eligibility criteria. We have compiled a list of different areas to help you find and narrow down the best option for your business.
Determine how much money you will need
Estimating your startup costs is not only a necessary element of your budget, but it can also help you determine how much money you really need. This can give you an immediate go-ahead for your search for funding and simply narrow down potential options based on the amount offered.
In addition, having a coherent financial plan can improve your chances of actually getting approved for funding. It shows your forward thinking and even has to be considered for traditional loans, investors and other funds that require a business plan or pitch.
Once you’ve planned how much you’ll need, it’s time to review your options.
One of the most common options is a traditional business loan. While the process and requirements are pretty similar regardless of the lender, there are different loan options that you should consider.
1. SBA loan
Small business management loans are often one of the first places small business owners in US look for a loan, and they rightly think so. This can be a good option if you meet the criteria.
If you are unsure if you qualify, read this article for details on the SBA loan program. If you applied and your application was rejected, check out this article on how to improve your chances of getting approval when you reapply.
2. Bank loans
Bank loans are possibly the most obvious solution for business owners looking for finance. While lending standards have become stricter over time, funds are often provided solely to small businesses, depending on the lender.
Browse around and look for lenders who you can actually speak to a real person when applying. This will ensure that you fill out the required paperwork and give you some insight into what you can do to improve your chances of getting approval. Typically, you are better luck chatting with a real person at a local bank or credit union. So do your research and chat with multiple institutions to find the best solution.
3. Small Business Lending Fund
This is a dedicated government fund that provides capital for small business loans through specific lenders in each state. The main benefit of this program is that it aims to grow the economy.
The more a bank increases its loan production, the less it pays for funding. Giving more businesses access to credit and potentially giving better interest rates or terms to business owners. You can check which banks are participating and download an application from the Treasury website that is updated monthly as banks enter and exit the program.
Entrepreneurs can also consider various grants to support their emerging idea. These are often difficult to acquire and include very specific admission requirements. However, that doesn’t mean they can’t be a viable funding option. Here is a list of the places to find the perfect scholarship for your business.
4. National Association for Self-Employed Grants
Since 2006, the National Association for the Self-Employed has awarded $ 650,000 in grants. Applicants can receive up to $ 4,000 and must use the money for marketing, advertising, hiring, or expanding facilities. You must be a member of the club to apply, which costs $ 120 per year.
5. Navs Small Business Grant
Nav is an online marketplace that uses credit and financial data to match small business owners with their best business financing options. Each quarter, Nav awards 3 scholarships, with the top scholarship winner receiving $ 10,000. This is to provide relief to small businesses that are struggling and hopefully empower them to reach their next level of success.
It’s easy to use. Simply explain your company, the challenges you are facing, and how the scholarship would help you move in the right direction. All details on Nav’s Small Business Grant can be found here.
6. Small business innovation research program
One of the more lucrative federal funding programs is the Small Business Innovation Research Program, which supports companies in research and development projects.
The program, which is coordinated by the US Small Business Administration, offers several types of grants: open, closed, prospective, and call lists. You want to find out which option is best for your business.
Expect a lengthy qualification process and, if selected, a rigorous measurement plan to ensure the money is being used wisely.
7. Amber Grant for women
Female entrepreneurs can take advantage of the Amber Grant. This grant was launched by Womennet in 1998 to help entrepreneurs succeed. Each month a woman is selected for a $ 500 scholarship. At the end of the year, one of the winners will be selected for a $ 2,000 grant.
It’s a simple application process. All you have to do is answer a few quick questions via an online form and pay a $ 7 registration fee.
8. National Institute for Health Funding
The SBIR / STTR grants provided by the National Institute of Health Funding are fairly specific to technology or research-based businesses. If you are of the appropriate type of business, speak to a program manager before applying to discuss the technology or study for which you would like to use the grant. This will give you an idea of what the institute is interested in and willing to fund, as well as guidance on developing your application.
9. Government Grants for Small Businesses
Possibly the most widely used grants are provided by the US government. However, these are usually industry-specific. This means that you need to check what is available for your type of business. The SBA has a handy section on their website that you can use to research which might be right for you.
Fintech financing options
Financial technology lenders (fintech) are institutions that offer loans or lines of credit as an alternative to conventional bank or government loans. More and more of these financing options are becoming available and typically offer similar loan amounts and loan terms.
That being said, you should check the lender track record, services, application requirements and customer support, and loan terms to find the best option. Here are just a few of the platforms currently available.
If you run an ecommerce business on eBay or Amazon, Kabbage is a great option for you. Kabbage overlooks the traditional collateral and creditworthiness criteria associated with most credit and is more concerned with your status as an online seller. You still need well-documented accounting data and cash flow statements, but the rest is determined by customer feedback, sales history, sales, and other digital metrics.
As long as you have a solid online sales history and your financial documentation is in order, you can easily be approved for unsecured cash advances within minutes.
Similar to Kabbage, OnDeck grants loans based on alternative metrics about your company’s health. If so, they’ll review your company’s annual earnings to determine eligibility and adjust the loan and payments to suit your needs. They also give you the option to apply for either a loan or a line of credit depending on your circumstances, which means you may be able to stick with a lender to meet your funding needs.
PayPal offers both working capital and traditional business loans, and awards loans based on an existing company’s earnings on its website. The main limitation of this service is that you currently have to make sales through PayPal and / or work through a PayPal business account in order to apply. However, if you already use PayPal, funding through them is incredibly fast, doesn’t require collateral, and doesn’t penalize you for low credit.
One disadvantage is that taking a loan through PayPal doesn’t build your business loan, which means that it doesn’t improve your chances of getting another business loan later. However, if you want to stay in the PayPal ecosystem, your chances of getting more money through additional PayPal credits will improve.
Instead of acting as a direct lender, Lendio instead acts as a funding platform. They work with a network of over 300 lenders including Kabbage and OnDeck to give users the best option for their needs. Instead of reviewing every single fintech organization and filling out different applications, you can just review hundreds at once and apply using a simple form.
The only downside to using a middleman like Lendio is that it will likely take longer to get your money to you. However, if you are looking for long-term financing that also offers great customer service, Lendio is well worth checking out.
On crowdfunding websites, you create promotional materials and set up a page for your business or project that accepts financial support from website visitors. Each site varies a little. So be sure to read the fine print when deciding which one is right for you.
Another option for crowdfunding is Indiegogo. Similar to other crowdfunding sites, you create a profile, tell your story, set a fundraising goal, and ask for donations. However, Indiegogo’s fee structure is slightly different – it’s not an all-or-nothing scenario. Indiegogo gets nine percent of your income if you don’t meet your goal and four percent of your income if you meet it. Here is the fee structure.
Kickstarter is the most popular crowdfunding site around. Since its inception in 2009, the site has raised $ 1.7 billion and funded 85,000 projects.
Like most crowdfunding websites, business owners create a profile page that describes the business and sets a donation goal. The donors are promised a reward, for example that they will be the first to try out the new product.
With Kickstarter, however, this is an all-or-nothing scenario. In other words, you need to meet your fundraising goal to keep the money. If you come up short, your donors will get their money back. Even if you achieve your goal, Kickstarter will charge a five percent fee. Learn more about Kickstarter’s policies here.
Kickstarter has name recognition, but there are plenty of campaigns out there too. From art projects to business ventures, everything is actively competing for funding. Therefore, you should rate the website to make sure it is suitable for your business.
Causes is specifically designed to fund social, political, and cultural initiatives, which makes it perfect for nonprofits. It’s completely free to join and it also acts as a social platform for like-minded people looking to make the world a better place. This means that in addition to being useful for raising funds, this platform is a great way to connect with donors, partners, and possibly even future employees.
If you have a digital media business such as podcasts, web series, or blogs, a monthly subscription-based model may be better for you. Fortunately, Patreon was designed as a crowdfunding platform specifically for digital developers. Instead of a single round of upfront investment or funding, Patreon allows you to set specific levels at different prices that your followers can subscribe to.
You can offer exclusive content, merch, access, and other items that increase in cost or quality so you can basically continuously user test them. It’s a great platform to build and connect with your audience directly while continuing to work on other social channels outside of your Patreon.
Just make sure you are on a schedule or your subscribers may find another place to spend their money.
18. Eligible for funding
Think of Fundable as a cross between Kickstarter and traditional venture capital finance. Rather than just releasing a single product or service, promote your entire business on the website for funding from venture capitalists and other accredited investors. You will continue to post timeline updates and an overall funding goal, but you will also need to present your overall business plan.
It basically acts as an ongoing pitch, but with a little extra investment on your part. Unlike most crowdsourced websites that normally charge a fee, Fundable charges a monthly payment to stay on the platform. In addition, it acts as an all-or-nothing funding system, meaning you have to meet your goal or lose it all.
Explaining your business concept to a banker is not always easy, but explaining it to your colleagues is a very different concept. Many startups have chosen to borrow money from their peers, but instead of asking your college buddy to cough up a few grand, try these websites instead.
Prosper is a well-known peer-to-peer lending office. It has been named recognition in the field, with $ 3 billion in loans made.
With this resource, you can get an interest rate based on a valuation. You create a credit list so investors can see what you’re up to and what you need the money for. Once an investor is committed to funding your loan, you will receive the money and set up a payment plan. The rates start at around seven percent, but can go up to 35 percent.
20. Lending Club
If you’ve been in business for a few years but need extra capital, check out the LendingClub. LendingClub finances loans through investors. You need two years of company history, annual sales of at least $ 75,000, and good personal credit history. There is a five year limit on how much you can repay your loan. As with any loan, there are interest rates and additional fees.
Upstart is designed to help younger business owners obtain funding with little to no credit or financial history. It does this via a drawing model that uses AI and non-traditional data to review and evaluate based on information such as educational level, work experience, place of residence, etc. This means that their requirements are far less stringent and that eligibility is solely based on eligibility on forward momentum and potential.
While the loans themselves are capped at $ 50,000, using Upstart can be a great way to consolidate high-yield debt or fund expansion for your business.
22. Financing group
Funding Circle connects your small business with investors. Loans range from $ 25,000 to $ 500,000. They will speak to a credit manager who will walk you through the process and you could get funding within two weeks.
The interest rates vary between six and 20 percent depending on how quickly you pay back the loan. In addition, origination and late fees apply if you miss a payment. Find out about the prices and fees before you apply.
Peerform is said to be beneficial for both investors and small businesses. The Online Portfolio Builder helps investors create unique and diversified portfolios that are tailored to their financial goals and risk tolerance. For borrowers with a credit score between 600 and 700, it offers incredibly competitive interest rates on short term loans up to $ 25,000 from just six percent.
While not the best choice for funding a full business expansion or start-up, it can be a great way for a relatively healthy business to pay off debts, make large purchases, or cover operating expenses for some time.
If you have a strong initial interest in your business and a roadmap for long-term growth, you may want to use venture capital for funding. You can use the SBA Investment Finder to find potential investors, or use one of the following platforms to showcase your company and connect with venture capitalists.
24. Funders Club
FundersClub was one of the earliest crowdfunding platforms for online venture capitalists, originally emerging from the YCombinator in 2012. For companies, you can either be financed exclusively by specific investors or join together as a diversified fund to form similar companies.
While it’s a great way to get yourself exposure to hundreds of accredited investors, it’s quite difficult to actually get on the platform itself. They only accept around 2% of applicants and even recommend that your company be recommended by a founder before applying. However, with a strong pitch and willingness to make connections, this is still a viable option for small businesses.
MicroVentures is the other original online venture capital platform that has long been providing funding for early stage startups. While they originally only offered traditional angel investment and venture capital options to accredited investors, they have adapted their platform to provide specific investment opportunities for each. This extension is particularly suitable for entrepreneurs looking for funding as it simply means that more people want to invest.
This open nature has its drawbacks as there are just so many companies looking for investments on the site. This can make it easy to get lost in the shuffle when you don’t have a solid pitch or can’t stand out. However, MicroVentures is an additional way to find potential investors, and it’s well worth exploring, even if it just adds to your options.
An angel investor is usually an individual or group with cash and ready to raise capital for a start-up or expansion. The main benefit of having an angel investor funding your business is that it is far less risky than a loan or venture capital because you usually don’t need repayment. Instead, an angel is looking for some sort of stake in your business and is ready to look further ahead to see a return.
So, if you’re ready to give up control and get an investment from an angel investor, here are some great options.
Gust acts as both an investment matching network and a tool to make your company more attractive to investors. Regardless of the stage of your launch, Gust will help you organize certain documentation, set benchmarks, identify gaps in your team, and develop a number of other methods to grow and improve your business. All with the intention of making it a simple yes for angel investors.
If you own and operate a business that focuses on retail and consumer products, CircleUp is the perfect platform for you to find funding. CircleUp uses its proprietary Helio platform for machine learning to provide funding to as many young entrepreneurs as possible.
Using publicly available, partner and private data (provided by entrepreneurs), the information is summarized into a digestible scenario that represents the potential for a company. It even helps CircleUp identify business opportunities related to an emerging trend. This can be useful for business owners who may not know how to take advantage of them.
CircleUp offers both credit and equity financing and is a diverse option that is great for those looking for angel investments. It also provides insights that they can use to improve their business.
28. Angel Capital Association
Think of the Angel Capital Association (ACA) as the hub for a network of angel investment organizations across North America. The ACA is less of a virtual platform and more an opportunity to connect with and build relationships with over 18,000 angel investors. It has been developed and is currently operating by engaging angel groups with individual investors.
While it’s more traditional in nature, it’s still a great way to research and learn from investors across a variety of industries. It can be a great tool for growing your business even if you don’t end up looking for funding.
Microloans are just smaller business loans. In many ways, these smaller funding options sparked the explosion of fintech organizations that eventually grew to offer both traditional and micro-credit. While there are usually specific restrictions on the amount of your income. However, a microloan can be a good option if you need some capital to fund certain operating expenses, extensions, or projects.
Accion is a global non-profit organization dedicated to helping small businesses secure profitable funding partnerships. In addition to loans, they also provide advisory services and continually lead thought leadership responsibility for financial inclusion.
They also provide funding opportunities for growing organizations working to accelerate global financial inclusion. While it may be less of a traditional micro-lender, it does ensure that every investment or partnership follows a specific methodology and goal. If this is in line with your company’s mission, Accion might be a great option for you.
LiftFund leads the Gambit when it comes to lending. Not only do they offer microcredit, but traditional and SBA options as well. This makes the range of loan amounts extremely wide, with the lowest option only being $ 500 and the maximum being up to $ 1 million. It’s a great option for companies that are either extremely new or don’t have enough monthly income to pursue traditional loan options.
The only downside is that LiftFund works similarly to local SBA or credit union locations. This simply means that if they do not operate in your area, then you are unlucky and need to find another option.
Kiva is a great example of an online microloan portal. It’s easy to use and the terms are great. US small businesses can borrow up to $ 15,000 at 0% interest. You can invite friends and family to fund you and then set up a 30-day fundraiser to raise funds from the Kiva loan community.
Once you’ve received funding, you have up to 3 years to repay it. However, you can use Kiva as a marketing platform to build your customer base and expedite your path to repayment.
32. Opportunity Fund
The Opportunity Fund acts solely as a microcredit provider for small businesses owned by low- and middle-income immigrants, people of color, and women. Her goal as an organization is to promote growth in low-income communities by helping entrepreneurs who have traditionally struggled to get funding. If you fall into one of these categories and are struggling to get a bank loan or even alternative financing, a micro-loan from the Opportunity Fund might be a better option.
Are you looking for a fun way to get your hands on business capital? Enter a contest. There are several competitions that take place throughout the year. If you miss the deadline this year, bookmark a recording next year.
33. Hatch pitch
If you’re developing a product or service based on innovative technology, you can showcase your idea during the Hatch Pitch, an event held each year at South by Southwest (SXSW). You have four minutes to present your startup to the judges. For more information on how it works, see the Hatch Pitch website.
34. theblackbiznews Disrupt
Disrupt is traditionally a personal event and this year it will be completely digitized. This theblackbiznews sponsored event is all about hearing from tech founders and networking to build your business. You will have the opportunity to interact with people from similar industries, introduce your company to investors and founders, and gain insights from the best and brightest in Silicon Valley.
Although this event is not necessarily a traditional pitch competition, it is a great opportunity for emerging companies to distinguish themselves and connect with founders.
35. WebSummit PITCH
PITCH gives startups that have received less than $ 3 million the opportunity to assert themselves and get their businesses going. The only criteria in order to actually apply for the competition is that you must be part of the WebSummit Launcher, which you can apply for here, before applying. The main benefit of any of the 135 startups participating is that even if you aren’t the winner, you get a ton of exposure from lenders and investors.
It also ensures that you’ve honed your pitch and got an incredible amount of practice to showcase in front of investors. There are some hoops to jump through to get involved, but it is well worth the effort if you are an early stage startup.
Bootstrapping: The time-honored tradition of doing basically anything you can think of to find money for your business. While all of the other funding options on this list are viable, you will likely be doing some bootstrapping variations to get your business ready. Here are some things to keep in mind.
36. Friends and family
This is a proven practice – the people in your life often believe in you and put their money where their mouth is. Here are some suggestions to help you navigate your fundraising process from friends and family.
37. Line of Credit
This is an option for those in need of cash quickly and with pretty good balance. Please see this article for more information.
38. Service or product pre-sale
Ich habe eine Freundin, die mitgeholfen hat, die Massageschule durch den Vorverkauf von Massagen zu bezahlen – sie hat einfach ihre Massageservices angeboten, nachdem sie LMT (lizenzierte Massagetherapeutin) geworden war, als Gegenleistung für einen Beitrag zu ihrem Unterricht. Nachdem sie ihren Abschluss gemacht und ihre Lizenz erhalten hatte, warteten diejenigen, die dazu beitrugen, auf eine „im Voraus bezahlte“ Massage, die sie nach Belieben planen konnten.
39. Verwenden Sie Ihre Ersparnisse / Verkaufsgüter
Obwohl dies auch als „Wetten auf die Farm“ bezeichnet wird und sicherlich riskant sein kann, ist es eine Option, Ihre persönlichen Ersparnisse zu verwenden und / oder eines Ihrer vorhandenen Vermögenswerte zu verkaufen und dieses Geld zur Finanzierung Ihres Geschäfts zu verwenden.
40. Verwenden Sie andere Einnahmen, um Ihr Geschäft anzukurbeln
Wie wir bereits auf Bplans geschrieben haben, haben viele Leute eine Nebenbeschäftigung, bis sie in der Lage sind, Vollzeit in Richtung ihres eigenen Geschäfts zu gehen. Ein gutes Beispiel ist die Anmietung eines Zimmers in Ihrem Haus über eine beliebte Website wie Airbnb.
Künstlerische + intellektuelle Aktivitäten. Soziale Gerechtigkeit. Schauspielerin. Modell. Musiker. Eugene // Portland.