You’ve dreamed about being your own boss for years. You’ve got a million-dollar idea, but you’ve got to foot the million-dollar start-up bill first. Or maybe you’ve taken over the family business, but you need a little extra capital to grow it any further. Small business owners know these situations all too well. Fortunately, the opportunities to fund your small business are nearly endless in today’s entrepreneurial world, as long as you know where to go and what to expect.
1. Local banks and credit unions
Small banks know small businesses. Community banks and credit unions are responsible for 58 percent of all small business loans in the United States. Big banks have 10 times the assets of local banks, yet they make only 22 percent of small business loans. Community banks and credit unions are known for their personal service, fewer fees and convenience. These lenders are in the community just like you, so they can better understand the challenges you face and the benefits your business brings.
2. SBA Loans
The Small Business Administration offers guaranteed loans for lenders across the country to offer small businesses. These loans are designated for veterans, women, disaster relief and other specific purposes. For lenders, they take the risk out of dealing with small businesses by offering guaranteed funds from the federal government. For small business owners, they offer personalized opportunities for funding backed by the support of the Small Business Administration. The SBA Loan Program also allows small business owners to narrow their search to specific banks and lenders, rather than going door-to-door to settle for just any financing opportunity. To get started, small business owners can contact the nearest SBA office or find the nearest SBA lender in their community.
3. Crowdfunding sites
If you’re tired of going from bank to bank, try online crowdfunding sites like Kickstarter and GoFundMe. These sites allow individuals to post a description of their business idea along with a fundraising goal. Then, anyone can contribute to the goal, whether they’re a venture capitalist or your neighbor. Oftentimes, the investors receive rewards later on for supporting the business, like repayment or free products. Crowdfunding has launched several successful start-ups already – in 2013, 3 million people pledged a total of $480 million to Kickstarter projects. Plus, it’s a great way to spread the word about your business before it’s even funded.
4. Small Business Incubators
It’s no secret that support for small businesses is growing by the day, but did you know that this new support could get your business free rent? Small business incubators are businesses – often with available retail space – that help other small businesses get off the ground. For example, Popuphood is a successful incubator experiment in Oakland, California, that gives eligible businesses six months of free rent in up-and-coming retail spaces to help minimize the risk of starting out. Popuphood has been so successful in Oakland that it will soon expand to other parts of California. See if there is an incubator in your area that can get your business off the ground and into a storefront.
Don’t let a lack of funding stop you from starting or growing your small business. Explore the traditional and not-so-traditional ways of financing your ventures so that you can achieve your goals and give back to your community.
IWS Content Team:
Alex is a junior at the University of North Carolina at Chapel Hill, where she is double-majoring in Public Relations and Spanish. Since becoming a writer for Independent We Stand, she has fully adopted the ‘buy local’ lifestyle. Her favorite indie business is Sugarland, a bakery in Chapel Hill, N.C, where she has been known to go a little cupcake crazy. She hopes to attend law school and pursue a career in nonprofit or political communication.