5 New Ways to Fund Your Business Dream
What is your business dream? Would you like to make an addition to your building or upgrade your facility in general? Do you need to expand your workforce through PEO services and want to make sure you have the budget to cover the increase in payroll? Perhaps you’d like to launch a new product line but the initial investment in inventory is substantial. Whatever your business dream is, the chances are that you’re going to need some type of small business loan to get it off the ground.
Finding Small Business Loans
Traditional small business loans that are available through conventional lenders and institutions are well-known, but they may not always be the best option for your business goals. Consider these five exciting ways to bring your business dream to life:
1. Local Corporate Grants
You can obtain small business loans in the form of grants, many of which never require repayment. While there are government grants out there, applying for and being approved for one is a highly complex process. An exciting opportunity that few people are aware of, however, is the corporate grant. Corporations provide capital to local small businesses to generate PR for the company’s name and to improve their reputation for community awareness. Each company’s criteria and terms will be different, so check around to find out what opportunities are available in your area.
2. The US Small Business Administration
In addition to providing a wealth of resources for small business owners, the SBA also has several programs available for small business loans. These include loans for businesses with special requirements, business financing, and microloans. The SBA typically partners with participating lenders to provide the full amount of the loan, deducting the 10-20 percent investment required of borrowers.
3. Social Lending
We have social networking, so why not have social lending as well? This is one of the newer ways to gain capital for your business and it is particularly helpful if your credit is not sufficient to qualify for traditional small business loans. Social lending networks consist of members who borrow and lend from one another. Interest rates tend to be lower than what you’d expect of other types of loans, and the money can be used for any purpose in most cases.
4. Angel Investors and Capital Venture Investors
Many wealthy, private individuals are willing to offer small business loans to some businesses in exchange for an ownership stake in the business. Generally, these investors look for the promise of future profit as the company grows, expands, or becomes a public company. If you don’t mind sharing a percentage of your ownership in order to start or expand your business, this type of funding may work for you. Each investor has their own criteria regarding which investments are sound investments, however, so you’ll have to do some research to choose the one that is most compatible with your dreams.
5. Enter a Contest
Over 100 entrepreneurial competitions exist annually that award cash prizes to the winners. Prizes may range from $5,000 to $50,000 or more, depending on the rules of the contest. While this is not a guaranteed way to obtain funds, a win is essentially free money that could lift the obligations that come with small business loans, since you don’t have to pay it back. It is definitely an option worth considering and one that could prove to be most rewarding.
From startup to expansion, businesses need capital to fund their dreams and goals. Use any of these ideas, or a combination of them, to get the cash you need to see your business dream become reality.
About the author
Carolyn Sokol is a frequent contributor to and writes about issues that may affect small businesses such as administrative duties which can be handled by Employee Leasing companies. She is a founder of PEOcompare.com which helps match small businesses with the right PEO company for their particular needs. Her background is in marketing and communications, employee education and training, development of policies and procedures and the ongoing delivery of outstanding service to customers.
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