How Can I Get Funding for My Business Fast?
As a small business owner, you are probably familiar with the notion that cash is king. The idea that the financial health of your business can largely be tied to cash flow and expenses is nothing new. Unfortunately, neither is the fact that being a business owner can sometimes be turbulent and unpredictable. When you find yourself a little tight on cash or facing challenging financial priorities, how can you secure more funding for your company? The good news is that there are several ways to fund a business, including small business grants, small business loans, and other funding alternatives. Let’s take a look at a few different types of financing and how you might go about securing them.
What Are the Top 7 Sources of Small Business Funding?
There are several different ways to fund a small business or startup. Each source of funding comes with its own benefits and risks. However, the right source for someone else might not be the right choice for you.
Small and Start-Up Business Loans: Loans are the most common source of funding for small businesses. When applying for a loan, you usually will be able to pick between several different vendors and find terms more suitable for you. Be sure to consider factors like payment terms, loan limits, fees, approval rates, and more when determining which kind of loan is best for you.
Personal Investment: When considering how to self-fund your business, the most straightforward way is with a personal investment. A personal investment consists of contributing your own cash or collateral on your assets to fund your project.
Love Money: Similar to a personal investment, love money is a personal investment — it just comes from a spouse, family member, or friend. With love money, the expectation is that it will be repaid at a later point once your business has sustainable profits to do so.
Angels: Angel investors are often wealthy individuals who invest in the early stages of your company’s growth. In many cases, they offer more than just funding and also contribute experience and networking opportunities to help ensure your company succeeds. In return for their time and money, they generally negotiate for a spot on your board of directors and the right to supervise your management practices.
Venture Capital: If you are looking to secure large amounts of funding in the millions, venture capital firms might be an option. While they are more comfortable contributing large sums, they also have specific criteria for who will receive funding and what they expect in return. Generally speaking, most venture capitalists will require some ownership stake in the company. Additionally, they are most likely to go into business with an organization that has high-growth potential and operates in a flourishing field such as healthcare or IT.
Crowdfunding: If you’ve ever contributed to a GoFundMe or Kickstarter campaign, then you’ve taken part in a form of crowdfunding. The idea behind crowdfunding is to source money from the general public either through donations, in exchange for equity, or as accrued debt.
Grants and Subsidies: Grants and subsidies are government-backed sources of financial support that generally do not have to be repaid (as long as you continue to meet the legal requirements). Grants can be beneficial to small businesses but usually take a bit more time and effort to secure. There is some competition for grant money, meaning that even if you apply, you are not guaranteed to get all (or any) of the funding available.
Small Business Funding FAQs
Now that we have covered the different types of funding available, it probably makes sense to answer some frequently asked questions you might be curious about.
What Is the Most Common Way to Fund a Small Business?
For established small businesses, loans are the most common form of funding. This is partly due to the fact that they are one of the most well-known funding options. Lenders also tend to offer various loan choices so you can secure funding with agreeable terms and conditions.
How Do I Get Money to Start a Business Without a Loan?
There are several funding options other than loans, as we mentioned above. However, for startups in particular, many companies elect to pursue crowdfunding, venture capital, angel investors, or specific startup grants.
How Do I Get Grant Money?
To successfully apply for grant money, you must ensure your business meets the Small Business Administration’s qualification criteria. If you qualify, you simply need to fill out the application, which can be a lengthy process. You will most likely need to provide detailed plans for your project, why you should get the money, how it would help, and how your project is relevant to the goal of the grant.
Secure Fast Funding With Backd
When you need funding for your business, you probably need it fast from a partner that you can trust. That’s exactly what Backd offers. We make it easy to secure up to $2 million in funding in a matter of moments. All you need to qualify is:
A U.S.-based business
At least one year in business
A minimum revenue of $300,000
A business bank account
Simply fill out the application today, and you could secure funding in as little as 24 hours!
