Starting your own business can be both exciting and daunting. On the one hand, you are starting a new venture, but on the other, many uncertainties lie ahead. But even though a great business plan can be a road map on how to run the business, capital is the most important element for a business to succeed. You can opt to get a traditional loan, but there are often certain difficulties in getting a small business loan. Take a look at some of the other options you can consider for business financing.
Community Development Finance Institutions (CDFIs)
There are many CDFIs across the country ready to finance startups. They also have reasonable terms where your business will not struggle to repay the debt. Check whether this is an option available in your community and get your business started.
In strategic partner financing, you get funding from another player in the same industry in exchange for distribution rights, staff, access to your goods, etc. This option is also good because you will be partnering with another large company that can help your business grow.
These are private equity investors that can provide your company with the funding it needs to expand. Instead of physical collateral, the investor gets an equity stake in your company.
Angel investors are somehow similar to venture capitalists. The big difference is that an angel investor does not mind investing in a startup that is yet to demonstrate growth. An angel investor will also guide you along the way on how to run the business.
Crowdfunding has become a popular business financing method. Crowdfunding platforms allow businesses to get funding from multiple investors instead of one source.
If your startup is based on scientific research, consider applying for a grant from the government. The Small Business Administration (SBA) usually offers grants to businesses in innovation and research. Check whether your startup meets the criteria.
Peer-to-Peer Marketplace Lending (P2P)
This financing option introduces business owners to lenders via different websites. Borrowers only need to create accounts on a P2P website and connect with lenders. The downside is that it is only available to specific states.
Are you looking for capital for your startup? Traditional loans are not the only option for business financing. Get in touch with Porter Capital Group. We can partner with you by providing the financing you need to grow your business. Call us today.