There’s a new wave of business sweeping the world in the last few years.
With the online boom, and the lowering of many barriers to start a business, there are literally tens of thousands of one person micro-businesses who have secured some form of small business funding that are providing their owners with a significant chunk of annual income.
Some of these businesses are small side operations making a couple thousand a month.
Some are full-fledged shows making well into six figures, and some are even leveraged enough to pull in seven figures. I personally know several individuals from each side of the spectrum.
In the history of the world, it’s never been easier to get started earning more money, but even for the most lean operations, it still takes a little bit of up front financing to get started, even for some of the unconventional thinkers out there.
Today I’ve got Lewis Kelly from Biz2Credit to help you with a few. Take it away Lewis.
Funding assistance to small businesses can come in several forms. Ensuring that funds are tapped from the right sources will help a borrower to achieve long-term objectives. Suitable financial solutions will empower startups and small enterprises to put an end to their financial problems in the way of their development.
Before undertaking the assessment for the right type of fund to suit their business model and capacity, a startup funds need to know the different sources of funding available for them. Here are some of them:
Bootstrapping is basically the pooling of your own resources to fund your business idea, and is the most common way people get started.
Dig into you personal finances, leverage credit cards, use the equity in your home, and even consider making use of retirement savings to meet the financial obligations required for setting up your own business. Even consider asking relatives for startup cash. Many businesses are started with a small loan from a relative.
The advantage with this type of financing is you maintain full ownership of your business. Moreover, there will no equity holders to be paid off when the company started churning profits. However, this option can take a significant amount of time to save enough to get started.
There are quicker ways to get started as well.
Under this type of arrangement, you can land up a loan from traditional financing sources such as banks and commercial lenders with the help of a SBA (small business administration) loan guarantee.
Borrowers do need to fulfill the eligibility criteria for accessing funds:
These are things like:
- Good credit score and history
- Stable financial condition
- Strong repayment capacity
- Valuable collateral
Although most startups may have a tough time securing loan under this arrangement, many entrepreneurs have achieved success by getting funds through this system. The best part is that borrowers do not have to give out equity for getting funds. Maintaining good terms with banks can help you secure additional forms of debt financing solutions.
These are special lending programs designed to help small businesses and certain specific types of businesses to secure interest-free grants or free money. Women business owners, minorities, veterans and tech small players can access grants. However, there are restrictions upon the way these grants can be used and stiff competition makes it a little difficult for small borrowers to access it.
Don’t let money get in your way if you’ve got a solid business idea. With so many sources of small business funding and startup financing available, getting cash flow should no longer be a big hurdle in the growth path.
Founded in 2007, Biz2Credit is an online credit resource for business loans, leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools . The company matches borrowers to financial institutions based on each business’s unique profile — completed in less than four minutes — in a safe, efficient, price-transparent environment.
Biz2Credit’s network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Follow us on Twitter @Biz2Credit for small business news and updates.