Start-up Business Funding

What you shouldn’t get a business grant?

A business grant is a lump sum of money offered to a business to help it carry on with its operation. Typically, these grants are administered by states, corporations, foundations, and trusts. Unlike other types of funding for business, grants don’t need to be paid back and most business owners don’t have to give up any of their equity in return for a business grant.

Many small businesses, however, are unlikely to apply for a small business grant because they are directly linked to the U.S. government departments, with very specific goals. Some industry groups that are an exception, however, including research as well as development companies, and other high tech firms.

State-level grants are also related to particular economic and/or social needs, and many grants suit specific businesses. That means you are supposed to match your loaned sum to your company’s funds.

Lastly, local small businesses who need grants are usually less competitive compared to federal or even state grants, but the small business grants cover less money than is needed. If a startup supports the local community, obviously, this might be a good way to get some needed funding for your business.

How to get a business grant

The best bet to get a business grant is by visiting the Grants.gov website, which is a searchable government database for all current government grants. As government grants for small businesses end and are added regularly, you should check back on the website periodically.

Here’s how to apply for a Federal Small Business Grant on Grants.gov

The Grants.gov website has a straightforward process for learning about and applying for Federal Small Business Grants:

• Learn about grants
• Test eligibility grants
• Search, Register, Apply for a grant
• Track your application

Startup business funding is an acquisition. Beyond the contributions of the founders themselves, some start-ups are raising additional investment in some or at several stages of their company’s development. Not all start-ups, trying to raise money, are successful in securing the necessary funds.

Getting Funds From Business Incubators & Accelerators:

Companies in the early operating stages should find Incubator and Accelerator programs as a funding option. Similar services are located in almost every major city in the US and they support hundreds of start-ups every year.

Using Business Credit Cards

There’s no question that any business owner would seriously consider, that business credit cards are one of the most successful ways to fund a business venture. It is a cost-effective way to finance start-ups, since they come with relatively low rates. Many business credit cards often offer interest rates at zero percent, often ranging over a period of 6 to 12 months. Business owners can also create their business credit history if they make good use of these corporate credit cards.

Using Your 401(k) to Finance Your Start-up

A 401(k) business funding strategy will certainly provide start-up funds to an aspiring business owner, but this is a strategy that can draw severe restrictions and some tax implications for the business owner. If you are not a financial expert, then it is advisable to try to seek a professional financial expert’s services before borrowing from your 401(k). Nonetheless, if you are currently employed and wish to start a company, your 401(k) balance may be a source of funding your start-up.

Crowdfunding

Crowdfunding is based on a large number of people raising small sums of money in order to start a business venture. This is mainly done through crowdfunding platforms, including GoFundMe and Kickstarter. At times, these campaigns may depend on the strength of your business plan, with an expectation that the business will reward supporters in return for the investment they put in your company.

Angel Investors

Angel investors are generally known to be rich and are famous because they have funded many startups. These individuals have deep pockets and in exchange for a given percentage of the company’s ownership, will invest in your business ideas. Aspiring business owners may be motivated by the fact that angel investors helped some of the most successful businesses like Yahoo and Google in their early stages. Some of the sites where these angel investors can be found, include New York Angel and the Angel List websites.

Though used interchangeably, the two definitions have few fundamental differences. Incubators are like a parent to a child, who nurtures a start-up company providing a business with shelter, tools and training, and networking guidance. Accelerators are more or less the same thing, but an incubator helps with supporting, assisting, and nurturing a company to walk, while an accelerator is helping the company to run and take a huge leap.

So, you have a fabulous idea for a business. You have completed your research, you have completed some market testing and you are ready to start your business. All that remains to be done is the needed  financing from start-up sources. And this might be where you hit a few bumps along the way.

Getting the required funding for a new start-up business can be tough, but when you know where to look, you can make your startup business funding dream  a reality.