Grants To Fund Your Small Business
Grants typically are distributed by individuals, businesses, and federal, state, or local governments and organizations. The most noteworthy benefit of a grant is that it doesn’t need to be repaid. Once you receive the funds, they’re yours to put toward your business. You don’t have to worry about making monthly payments with interest to pay it back. If you’re a startup or newer business with limited capital, grants can be invaluable.
Loans To Fund Your Small Business
Unlike grants, business loans must be repaid. There are a number of places you can turn to for loans, including friends and family, banks, credit unions, and online lenders. To take out a loan, you should have a solid business plan and financial documents such as balance sheets and income statements. Shop around and compare offers so you can land the lowest rates and most favorable terms.
Investors To Fund Your Small Business
If you go the investor route, you can receive business funding in the form of venture capital investments. In most cases, investors offer venture capital in exchange for an ownership share and an active role in a business. Investors typically focus on high-growth organizations and ask to be on the board of directors. You can look for individual investors or “angel investors’’ and share your business plan with them.
Crowdfunding To Fund Your Small Business
Crowdfunding is when a “crowd” rather than one or two investors fund your business. Typically, crowdfunders expect a “gift” from your business, such as a product you sell or a meeting with a business owner. While there are many crowdfunding websites you can use, some of the most popular, reputable options include Kickstarter, GoFundMe, and CircleUp.
Invoice Factoring To Fund Your Small Business
Invoice factoring might make sense if you’re facing cash flow issues and your customers tend to pay you late. With this option, you sell all or a portion of your unpaid invoices to a factoring company. The factoring company will then give you immediate cash. Once they collect payments from your customers, they’ll distribute the remaining amount minus a fee.
Selling Your Business To Fund Your Small Business
At some point, you may decide to merge with another business or sell your business to a larger organization. Since a larger business will likely have more capital and resources, it can help you grow your business. Another option is to sell your business for a profit and use the proceeds to finance a different venture.
