When you are preparing to start a new business, you may not put much thought in to business funding options. While this seems strange, many new business owners only consider the obvious small business funding options. While these are the best financing solution for many, there are definitely other options out there that should be considered when it comes to funding a new business.
Of course this is one of the commonly known methods of small business funding. Venture capitalists and angel investors have been around for a long time. Crowdfunding is a relatively new business funding option that allows multiple investors, or a crowd, to invest small amounts toward a new business. These small amounts can add up nicely with a large enough “crowd” of individuals.
The natural evolution of crowdfunding is marketplace lending. What has happened is that non-bank institutional lenders, such as insurance companies and family funds, are willing to invest in loans available through an online platform such as Biz2Credit.com. Institutional investors typically offer quicker response times than banks and better interest rates than competing non-bank lenders.
Government Loans and Grants
Many small businesses are eligible for loans that are guaranteed by the government or grants from the government. Businesses run by women, minorities, or veterans may be able to find government financing for their business. In addition, business owners operating in rural areas can often find government assistance. SBA-backed loans helped sustain small businesses during the Great Recession and the ensuing “credit crunch.”
This is a small business funding option that is often overlooked. If you have a plan to start a business that offers a specific product or service, offer presales and use the cash to help fund your business. If you are selling bread for the holidays, sell as many loaves as you can in advance, using the proceeds to purchase supplies for what is already sold, and the profits to purchase supplies to make more bread to sell. If you need to order inventory, offer the product for preorder.
A Side Business
Similar to presales is the options of running the business on a smaller scale on the side, or even a totally different business, pouring all of the proceeds into financing the business you wish to start. If you want to open a restaurant but need your own funds to put toward it, try cleaning homes, walking dogs, cooking meals, or doing handy work during off hours or on the weekends. If you want to open a boutique, try selling products from home or online firs, saving all of the profits to put into opening as store front.
Of course traditional financing is probably going to be needed at some point regardless. When the time comes, Biz2Credit can help. Our extensive network of lenders offers various business funding options, and we do all the work of finding the perfect lender for you. Visit Biz2Credit.com today for more information.