many small business owners, the most significant obstacle to getting the
business up and running is finding funding. Without startup money, it’s
difficult to get the supplies, inventory, and promotional materials needed to
get things moving.
Luckily, there are many options for new business owners to secure funding for any aspect of their startup. We’re sharing a few of those options, below.
most popular business loans come from the Small Business Administration. That’s
because these loans offer reasonable rates and flexible terms that are designed
specifically for small business owners. The standard SBA 7(a) loan can be used
for things like working capital and purchasing equipment. The loans can be up
to $5 million, which can be incredibly helpful for those in need of major
purchases to get a business off the ground. However, these loans can be
difficult to qualify for.
Another SBA option is the microloan program. Because these small startup loans come in smaller amounts, up to $50,000, the qualifications are much easier to meet and the process tends to be faster than the 7(a) program. You can use SBA microloans for things like working capital, inventory, and expenses related to getting your business going.
Business Credit Cards
may be confident that your business will be turning a profit in no time. Until
then, a business credit card can help you make purchases to make that profit a
reality. Opening a business credit card will also help you build your business
credit, separate from your personal credit, which will help you secure loans
and other funding later.
Another major benefit of opening a business credit card is that most cards have excellent rewards programs. Choose a card that has a rewards program that will help your business grow. If you travel often for work, a travel rewards card might be a great option. Others might prefer a cash back rewards card.
Business Line of Credit
Like a business credit card, a business line of credit allows business owners to borrow money that needs to be repaid with interest. Your credit limit will depend on a few factors, including your monthly revenue and how long you’ve been in business. Typically, these lines of credit will go up to $250,000.
When you’ve been approved for a business line of credit, you’ll be able to draw on that money whenever you need it. This is a great option for those who are in the process of building or growing their company when there’s some uncertainty about what expenses might come up. During the draw period, you’ll be able to access your cash whenever you need it, pay down the balance, and continue borrowing.
Small Business Grants
Not all funding options will need to be repaid. There are many grant options available to business owners, especially those that are serving a specific client base or working in a niche industry. Be sure to do some research to look for grants available to you and your industry and put that free money to good use. Check out these grants for small business owners, grants for women business owners, and grants based on location to get started.
funding option is ideal for those who believe they have a truly unique product
or service to offer. Crowdfunding is simply presenting your business idea to
the public and inviting others to invest in your company. In exchange, you can
offer rewards, special deals and promotions, or even equity in your company.
There are dozens of websites that make crowdfunding easy and even fun. Look at Kickstarter, Indiegogo, and Crowdfunder to get started.
As your business grows, you’ll find that the funding options will grow as well. With more revenue each month, you’ll qualify for term loans and asset-based lending options that will allow you to continue investing in your company. In the meantime, use the options above to build your business and set yourself up for a successful start.
Checking for pre-approval will not affect your credit score.