Contents
- 1 40 Ways to Fund Your Small Business Efficiently
40 Ways to Fund Your Small Business Efficiently
Finding funding for your small business is not a one-size-fits-all approach. Each business has unique funding needs, and each funding option varies in availability, terms, amounts, and criteria. To help you narrow down your options, we’ve compiled a list from various sources.
Determine your funding needs
Estimate your startup costs to determine how much funding you need. This will help you focus your search on options that offer the desired amount. Having a solid financial plan also improves your chances of approval.
Once you know how much you need, it’s time to explore your options.
Consider traditional loans
Traditional business loans are widely available, with different options to consider.
1. SBA loans
Small Business Administration loans are a popular choice in the United States. Familiarize yourself with the criteria and consider reapplying if your initial application was rejected.
2. Bank loans
Explore loans offered by local banks or credit unions that cater to small businesses.
3. Small Business Lending Fund
This government fund provides capital for small business loans, which helps grow the economy. Check which banks participate and find the application on the Treasury website.
Look into grants
Grants are a viable funding option, although they often have specific eligibility requirements. Here are some options:
4. National Association for the Self-Employed Grants
The National Association for the Self-Employed offers grants for marketing, hiring, and expanding facilities. Membership is required to apply.
Nav matches small business owners with financing options through their online marketplace. They offer quarterly grants to struggling businesses.
6. Small Business Innovation Research Program
This federal grant program is for research and development projects. Look into which type of grant suits your company.
7. Amber Grant for Women
Female business owners can apply for the Amber Grant, which awards monthly and yearly grants.
8. National Institute of Health Funding
The SBIR/STTR grants from the National Institute of Health pertain to technology and research-based businesses.
9. Government Small Business Grants
Research industry-specific grants offered by the U.S. government through the SBA.
Explore fintech funding options
Fintech lenders provide alternative loans or lines of credit, often with similar terms to traditional banks.
10. Kabbage
Kabbage considers your online selling history instead of collateral or credit score for eCommerce businesses.
11. OnDeck
OnDeck offers loans based on your business’s annual revenue and allows you to choose between a loan or line of credit.
12. PayPal
PayPal offers working capital and business loans based on your earnings on their site, without penalizing low credit scores.
13. Lendio
Lendio is an aggregate platform that matches you with the best financing option from a network of lenders.
Consider crowdfunding
Crowdfunding allows you to raise funds through online platforms by creating a compelling campaign.
14. Indiegogo
Create a profile, set a fundraising goal, and ask for donations on Indiegogo. They have a unique fee structure.
15. Kickstarter
Kickstarter is a popular crowdfunding platform, but it operates on an all-or-nothing funding scenario.
16. Causes
Causes focuses on funding social, political, and cultural initiatives, making it ideal for nonprofit businesses.
17. Patreon
Patreon is a subscription-based crowdfunding platform for digital creators offering exclusive content and connecting with your audience.
18. Fundable
Fundable is a platform where you can promote your entire business to attract funding from venture capitalists and investors.
Consider peer-to-peer lending
Borrow from peers through online platforms instead of traditional banks for potentially easier approval.
19. Prosper
Prosper is a well-known peer-to-peer lending site with personalized interest rates based on evaluation.
20. LendingClub
LendingClub connects borrowers with investors and requires a minimum of two years of business history and good personal credit.
21. Upstart
Upstart is a peer-to-peer lending platform that evaluates based on nontraditional data for young entrepreneurs.
22. Funding Circle
Funding Circle connects small businesses with investors for loans ranging from $25,000 to $500,000.
23. Peerform
Peerform offers short-term loans to borrowers with credit scores between 600-700 at competitive rates.
Consider venture capital
If you have a solid business concept and long-term growth potential, venture capital may be an option.
24. FundersClub
FundersClub is an online venture capital platform for accredited investors and offers exposure to a network of investors.
25. MicroVentures
MicroVentures offers investment opportunities to early-stage startups and allows non-accredited individuals to participate.
Consider angel investment
Angel investors provide capital in exchange for a share in your business, without the need for repayment.
26. Gust
Gust helps make your business attractive to angel investors by organizing documentation and setting benchmarks.
27. CircleUp
CircleUp focuses on providing funding to retail and consumer product businesses through their proprietary Helio platform.
28. Angel Capital Association
The Angel Capital Association connects entrepreneurs with angel investment organizations throughout North America.
Consider microloans
Microloans are smaller loans that can fund specific operational costs or projects.
29. Accion
Accion is a global nonprofit that offers microloans and advisory services to small businesses.
30. LiftFund
LiftFund provides microloans, including traditional and SBA options, catering to new or low-revenue businesses.
31. Kiva
Kiva allows US small businesses to receive interest-free loans of up to $15,000 through a fundraising campaign.
32. Opportunity Fund
The Opportunity Fund focuses on providing microloans to businesses owned by low-income individuals.
Explore pitch competitions
Enter contests for a chance to win business capital and gain exposure.
33. Hatch Pitch
Participate in Hatch Pitch, where you pitch your innovative tech-based idea to judges.
34. TechCrunch Disrupt
Join the TechCrunch Disrupt event to network and pitch your business to investors and founders.
While not a traditional pitch competition, this event is a great opportunity for emerging businesses to connect with founders. PITCH provides startups with less than $3 million in funding a chance to pitch their businesses. The only requirement to apply is to be part of the WebSummit Startup Program, which you can apply to here. Participating in the competition exposes you to lenders and investors, even if you don’t win. Additionally, it helps you refine your pitch and gain practice presenting to investors. Although there are hoops to jump through to get involved, it’s worth the effort for early-stage startups.
When it comes to funding options, bootstrapping is a time-honored tradition. While other funding options are viable, bootstrapping should be considered. One option is reaching out to friends and family, as they often believe in you and are willing to invest. Another option is a business line of credit, which is beneficial if you need cash quickly and have good credit. Alternatively, you can presell your services or products to generate funds. Using personal savings or selling assets is also an option, although it can be risky. Lastly, using other income to fuel your business, such as having a side hustle or renting a room through Airbnb, can help support you until your business takes off.
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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
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