How to Find Business Funding for your Startup
Once you’ve made the decision to start your own company, you’ll need to secure funding. Regardless of industry or niche, all businesses need capital to perform their daily operations. Without capital, you won’t be able to cover expenses like payroll, inventory, lease/rent and insurance. Today we’ll look at how to find business funding for your startup or project.
How to Find Business Funding
Create a Business Plan
Before seeking funding, you should create a business plan. As explained by the U.S. Small Business Administration (SBA), a business plan will guide you through the stages of starting and managing your business. You can use it to structure your business for a higher level of success, as well as presenting it to prospective lenders when applying for loans and capital.
While there’s no wrong way to create a business plan, the SBA recommends using a traditional format consisting of an executive summary, company description, market analysis, organization and management, funding request, financial projections and appendix.
Personal Cash and Credit
One option to consider when deciding how to find business funding is using personal cash and credit. In fact, most small business owners use at least some of their personal cash and/or credit to fund their business. If you have a financial nest egg in the form of a savings account, for instance, you can tap into it to fund your business. You don’t have to necessarily fund your business solely with personal cash or credit. Rather, consider using it in conjunction with other, more traditional funding methods.
Small Business Bank Loan
Another funding option for small businesses is a bank loan, although with banks lending less, it could be difficult to acquire. From national banks to locally owned and operated banks, many financial institutions are willing to lend money to small businesses. They’ll look over your business plan, and assuming it appears profitable, they may offer you a fixed loan under certain repayment terms.
Line of Credit
Not to be confused with a bank loan, a business line of credit differs in the sense that you can continue using it. If a bank gives your business a $15,000 line of credit, for instance, you can continue using that $15,000 by paying it off month after month. This makes it particularly attractive funding option for small businesses in need of capital.
Of course, there’s also equity capital. Unlike bank loans and lines of credit, you don’t incur debt with equity capital. Rather, you sell a portion of your company’s stock shares to an investor or investment firm. The investor receives partial ownership of your company, while you receive capital needed to fund your business.
This article was brought to you by Intrepid Private Capital Group – A Global Financial Services Company. For more information on startup and business funding, or to complete a funding application, please visit our website.