How to Get Funding for a Small Business
Does your business need funding?
Are you having trouble deciding what type of financing your business may qualify for?
Well, the good news is you’ve come to the right place for some answers. On the previous post I covered planning your business funding strategy by first doing a business credit analysis.
In this post, I’ll cover some of the more popular funding programs that are currently available. Now keep in mind, each type of funding program is designed to cater to a specific aspect of your business depending on a variety of factors.
Ideally, you want to position your business to have access to multiple sources of financing.
Here are several ways to get funding for your business:
1) Vendor Lines of Credit – This by far is one of the easiest ways to acquire credit as a small business. While trade credit is more of a short term financing tool it enables you to acquire the products and services your business needs from a supplier while deferring payment for a later date. However, one of the drawbacks using a vendor line of credit is its limited usage; you can only use it with that supplier.
2) Unsecured Lines of Credit – There are two main types of unsecured lines of credit your business can get. There’s the traditional line of credit at a bank and the untraditional line of credit in the form of unsecured business credit cards. Each type of unsecured line of credit has its advantages and disadvantages but when it comes to qualifying I tend to favor business credit cards.
The reason is with business credit cards you don’t have to deal with financial reviews every two years and the risk of having your line of credit converted into a loan which is what a bank can do with a traditional line of credit.
3) Business Term Loans – During the economic downturn getting a traditional business loan was nearly impossible. The good news is the lending cycle is improving and there are better loan programs now available for franchise startups and small businesses Programs such as SBA Loans and revenue based loans have become extremely popular for small business owners.
4) Equipment Financing – This type of financing is ideal if your company needs business equipment. Equipment financing enables you to conserve your cash instead of having to shell out a 10-15% down payment. You would be surprised on what type of equipment you can lease.
5) Crowdfunding/Private Investors – Apart from traditional sources of investor financing a popular alternative is known as crowdfunding. Funding your project or business venture by raising small amounts of money from a large group of people is a powerful way to get funding for your business. However, you do need to have a very effective video presentation and compelling message in order to be successful in crowdfunding with the general public.
As you can see there’s no shortage of funding programs available and this list barely scratches the surface. However, in order to know how to get funding for a small business you should really conduct a business credit analysis, secondly, determine which funding programs you may qualify for, and finally, plan and implement a short term and long term funding strategy so your business can maximize its funding potential.
Are you ready to get funding and build your business credit? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free business credit building audio seminar ($597 value) =>
To Your Success In Business and in Life!
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.
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