Financing Alternatives for Small Businesses

Linda Jenkins, February 22 2016

alternatives for financing a startupAs a small business owner, there will be many times during the life-cycle of your business that you will require an infusion of money. If you have been running your business for some time, you probably know that trying to find financing through a bank is very difficult. In fact, only 30% of business owners successfully find funding this way. So, what are the other opportunities available to you?

This depends on what stage of business you are currently in, since many lenders require a financial history.

Here are some financing alternatives listed by stage:

Early Stage / Startup

One Spark - a unique in-person crowdfunding platform
SCORE - check this resource for mentors that can match your company to funding
ZimpleMoney - formalize lending from friends & family


One to Five Years

Angel Investors - Find investors through the Angel Capital Association. 
Kabbage Working Capital - up to $100,000 for your online business
Bootstrapping - invest profits back into your business
Crowdfunding & Peer-to-Peer Lending - Learn More


Established

All of the above, plus:
Equipment Leasing
Merchant Advances & Purchase Order Financing - Learn More
On Deck
Traditional Banks - loans & lines of credit

As you can see, the longer you have successfully run your business, the more opportunities you will have available to you. Once you find a lending resource, be sure you are aware of exactly what fees and interest rates will affect your loan over time (or, in the case of equity financing, how much ownership you are giving up and the implied valuation of your company). If possible, consult with a Certified Public Accountant and Attorney before signing any financial agreements.