Startup Funding Options

Businesses live and prosper according to their financing. You can grow your company with sufficient resources, recruit new employees, increase your inventory and improve sales. The reverse appears to happen, without sufficient resources.

Business owners have plenty of financing options at their fingertips, if they know where to look.

In this article we will address the five best small business funding choices. We’re going to take you through pros and cons and help you get started. Read on to find the best possible Startup Funding Options for your company.

Loans

Many company owners find it synonymous with “support” and “loans”. Although this isn’t true (loans are just one of the five types in this article), loans have built a reputation as a secure, conventional way of financing your business.

This, of course, does not make them the best option for everyone. Small business loans appear to work better for business owners who have these resources: a strong personal credit score and a company with a background of six months or more. Good corporate cash flow SBA loans are guaranteed by the USA. Small Business Management. There are a few different forms of SBA loans, but they will all provide you with low interest rates, small down payments and long term loans. However, in order to get one you would have to follow certain strict requirements, which means SBA loans come with a long waiting period. So if you’ve been in operation for at least two years and have good credibility, you’re getting a lot of SBA loans.

Credit Lines

Credit Lines on the other hand, will give you easy access to funds, making them perfect for businesses with cash flow issues (e.g., payrolling before paying for invoices). With a revolving credit line, you pay interest only on the money you use and you get ongoing access to the funds rather than a lump sum up front. You do however run the risk of rising or falling in your credit line if your income decreases.

Credit Cards

Credit Cards provide a different type of revolving credit. Unlike credit lines, business credit cards tend to operate well for small, incidental expenses, such as covers for a team lunch or new business cards. That’s both because they appear to be more convenient (you can carry your wallet with a credit card) and more expensive (higher APR). Moreover, credit cards can generate business equity, making them a good choice for most companies.

Term loans

Term Loans do give you a lump sum upfront and then over time you repay the loan plus interest. Nearly any company having to fund big, scheduled expenditures will benefit from a term loan. Terms loans also have decent interest rates, so you can get large amounts of money; however, many do come with early repayment penalties, so expect your term loan to be a long-term financial commitment.

Friends and family

Maybe borrowing money from friends or family is the most common way to fund a new small business. Of course, if your reputation is bad (and it’s known to your family and friends) you’ll have to reassure them that you will pay them back. The potential cost of failure in these circumstances isn’t just financial; it’s personal.

“Business is personal, no matter what people say,” says David Nilssen, Managing Director of Guidant Financial, a small business finance company. “It will be impossible for most people to differentiate the two.” Narrow your list of friends and family to those who appreciate your intentions, and do your best to make sure the risks involved are secure.

Crowdfunding

Crowdfunding has become a common way for small companies to raise funds, thanks to platforms like Kickstarter and Indiegogo, which allows you to apply for funds through online campaigns. You send them gifts instead of paying back the sponsors, which is why this scheme is often called crowdfunding rewards.

New opportunities are now opening up for equity crowdfunding, where you tap a large pool of investors who decide to finance your small company in return for ownership of equities. It has recently become an even broader choice with new securities rules enabling small business owners to reach out to mom-and-pop investors, not just accredited investors.

Crowdfunding is perfect for the investor who; “has a product and wants to check the demand and confirm the potential,” says Nilssen. “No credit available”,Grants Small-scale grants from private foundations and government agencies are another way for the small company to collect investment funds. These aren’t always easy to get, but free resources for some new companies may be worth the hard work.

For example, you can receive small business grants for veterans if you served in the US military. Small business grants are eligible for women, too.

One should not let the overwhelming process of going to a lender and filling out a pile of forms deter you from receiving the financing you need. Our application for online small business lending is simple and straightforward. Once you press “send” you will be contacted by one of our loan specialists to help customize your business lending. In as little as 24 hours, you will be given a decision, so you can get back to running your company. Login now to kick off.

“Small business owners should be surrounded by people who are keen on their success”.

USA Funding Pros, experts in loaning took the time to figure out what we were looking for rather than pushing what we had out there. “We are a dedicated loan specialist with National Support who knows the ins and outs of the small businesses. Most importantly, your loan advisor will take time to get to know more about you and your business and guide you on the best Startup Funding Options available to you, for small business loans.