The 3 Ways To Fund Your Small Business Startup

It doesn’t matter how great a product you are trying to sell, or how useful your services are if you can’t get the funding to start your small business. It can be very expensive to start a business since you not only need the startup costs but also have enough money for the ongoing expenses while you wait for a steady stream of revenue.

The most obvious place to start for funding is to get a small business loan. This is obviously a great place to start but the loan may not be enough to float the business long enough until it sees some success.

In this article, we will go over several ways to secure funding for your small business so you can see it grow and thrive.

1 - Traditional small business loan

The most obvious and traditional way to fund the startup is to get a small business loan. It is affordable and straightforward. There are times when it isn’t sufficient to have this be the only source of funding.

Many small businesses would do well to find a small and idepependent bank to work with since they understand the local market and what a small business in the area needs. Usually the terms are also more favorable. For instance, if you live in the Ozark area, then Ozark Bank is ready to help your business grow with small business loans in a way that big banks wouldn’t as they have little interest in the local economy.

Another advantage to using a small business loan is that you are in control of the business and can use the funds in any way that you see fit. As you will see, some of the other methods will require giving up some shares of the business or other restrictions on how the money is used.

2 - Crowdfuning

There are many platforms these days that allow for getting loans from regular people. Think of it like asking a friend for some cash with guarantees on how and when it will be paid back. P2P lending works the same way but in a much bigger way.

These platforms match lenders with borrowers based on the criteria that both are looking for. It can be a great way to secure lending without necessarily giving up any control of the business. However, there are some platforms that ask for giving up shares for the loan.

3 - Government grant

When a small business has trouble getting a small business loan from a bank, the government can step in to help with a grant. There are a wide variety of the types of government grants available for small businesses. There are also different agencies that provide them so it pays to check with federal, state and local sources for grants to see which ones you qualify for.

The biggest benefit to these grants is that they don’t need to be repaid. The problem is that it can be difficult to find the one that you qualify for and it can take a while for the funds to come through.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes