19 Small Business Funding Resources to Boost Your Capital

Small business funding resources

Every business starts with an idea. You need money to manifest your ideas into reality. So, as a small business that’s ready to scale, what are your financing options? A traditional option like a bank might not be as helpful if you need funds fast and don’t meet their requirements.

Here’s a list of 19 business funding resources to fuel your operations.

First, What are Funding Sources for Small Businesses?

A small business funding source is the source of working capital that enables a company’s trade operations. Small businesses get financing by using all types of capital sources. Most people think of traditional business loans when they consider cash flow options. However, a bank loan is just one of many options. So, how can a small business raise money?

  • Traditional bank loans – Term loans financed through a bank or credit union, usually paid back in monthly increments over the course of 1-25 years.
  • SBA loans – Small loans financed through a bank or credit union that are partially guaranteed by the SBA. These loans usually have lower terms and interest than traditional bank loans.
  • Personal investments (“bootstrapping”) – The use of personal savings, assets, and credit to finance business operations.
  • Business credit cards – Revolving credit extended to businesses for operational expenses. Credit cards are generally used as a credit-building tool.
  • Crowdfunding – To collect small amounts of capital from a large number of people in exchange for a future reward.
  • Angel investments – Financial backing acquired from individuals with a high net worth in exchange for a stake in your business (similar to venture capital).
  • Love money – Capital extended to a business from family members or friends of business owners.
  • Venture capital – Private equity invested in a small business with expectations of a future return (similar to angel investments).
  • Microloans – Very small loans extended to impoverished borrowers who lack collateral and verifiable employment or credit history.
  • Invoice factoring – The discounted sale or transfer of a business’ accounts receivable in exchange for cash.
  • Merchant cash advances – Lump sum payments to a business in exchange for a percentage of future debit and credit transactions.
  • Working capital loans – Short-term business loans used to pay for daily operational expenses.
  • Disaster relief – Financing offered to businesses after a natural disaster to repair damages not covered by insurance.
  • Government grants – Free government money used to fund business operations for the betterment of a community or group.
  • Private grants – A gift of money to a business with goals congruent to the financing party.

With so many possibilities, you’re sure to find the funds you need to keep your company running like a well-oiled machine.

Next, What Government Grants are Available for Small Businesses?

One of the most sought-after funding options is a government grant. Who doesn’t want free money to start a small business or scale operations? But, you need to be aware that these are the unicorns of small business finance. Here’s why.

Most government grants are reserved for farming or scientific research and development. There are some funds allocated for the State Trade Expansion Program (STEP), and these can be used only for business export development. So, unless your business involves rural farm work, important research, or you’re looking to export products to another state, it will be extremely difficult to qualify for a grant.

What are the Four Types of Grant Funding?

If you are able to qualify for a government or private grant for your business, know what to expect. There are four main types of available grant funding.

  1. Competitive/discretionary funding – A team of reviewers will select a limited number of applicants based on a pool of competing businesses. Competitive grant recipients are merit-based.
  2. Continuation funding – An existing business grant is renewed.
  3. Pass-through funding – An awarded government grant is distributed by the recipient (business) to a third-party. The third-party might be another business, an organization, or an individual.
  4. Formula funding – A formula is used to determine the grant amount and the recipient. This type of funding is typically used to allocate mandatory funds to state and local governments.

Except in rare circumstances, you are more likely to qualify for a type of business funding other than a grant. Check out the following resources to see what financing is out there for you.

Finally, What Business Funding Resources Can You Leverage to Power Your Working Operations?

Here’s a complete list of small business funding resources to help you find the cash you need, no matter what situation you’re in.

1. Small Business Administration (SBA)

Funding Type: SBA loans, venture capital, and disaster relief

The SBA is a government organization created to help small businesses in the United States succeed. They offer guidance and funding options for business owners.

2. SCORE Funding Resources

Funding Type: Other resources
Like the SBA, SCORE offers guidance to small business owners. Their primary goal is to provide free mentorship for budding entrepreneurs. But, they also have a funding resource database that could be super helpful.

3. America’s Small Business Development Center (SBDC)

Funding Type: Other resources
America’s SBDC is a resource center for small businesses in the United States. Their partners offer many resources for small businesses, including several funding tools.

4. Women’s Business Center Micro Lending

Funding Type: Microloans
Developed to help female entrepreneurs navigate their way through the world, Women’s Business Center offers low-risk microloans to business owners. They also offer counseling and education to launch and scale.

5. Veterans Business Outreach Center (VBOC)

Funding Type: Other resources
The VBOC is a branch of the SBA dedicated to veterans in business. They offer “Basic Training” and resources including free funding education.

6. Grants.gov

Funding Type: Government grants
Grants.gov is an interactive directory of government grants. Leverage this tool to search the database and discover grants that your business might qualify for. Be sure to search by minority categories you may fall under as well as state and local programs.

7. Dun & Bradstreet (D&B)

Funding Type: Other resources

D&B is America’s most popular business credit bureau. First, apply for your D-U-N-S™ number. Then, use the platform’s powerful insights to make better financial decisions including which type of funding to leverage.

8. Experian Business

Funding Type: Other resources

Another business credit bureau, Experian Business can provide you with helpful credit reports, risk management, and personalized product comparisons. They also provide loan offers for small businesses.

9. Equifax Business

Funding Type: Other resources

The third major business credit bureau in America, Equifax Business provides you with financial solutions based on your credit profile and helps you assess your credit risk before you apply for funding.

10. NCUA’s Credit Union Locator

Funding Type: Traditional bank loans & SBA loans
The NCUA’s Credit Union Locator can help you find a funding source near you. If you’re interested in semi-traditional financing from an institution other than a bank, find a credit union and explore their options.

11. State Trade Expansion Program (STEP) Awardee Directory

Funding Type: Pass-through government grants
The STEP program is a government-awarded pass-through grant that can be leveraged by small businesses to expand their trade region. Find a STEP awardee near you to find out how to apply.

12. Nav

Funding Type: Business credit cards, traditional business loans, and SBA loans
Nav is a credit monitoring company and financial affiliate that can connect you to educational resources and funding options that make sense for your situation.

13. Fundable

Funding Type: Crowdfunding
Fundable provides a modern way for businesses to raise capital online. Reward your backers with equity in your business operations or creative rewards that will entice them.

14. Kickstarter

Funding Type: Crowdfunding
If you have an outside-the-box idea for how to take your business to the next level with art, design, or music? Try impressing the Kickstarter world with a fundraising campaign. This can be a great crowdfunding channel for the right projects.

15. Indiegogo

Funding Type: Crowdfunding
Do you need funds for your new, innovative invention? Bring your idea to the Indiegogo community and run a funding campaign. The more creative rewards you can come up with for backers, the more likely you’ll be successful.

16. Crowdfunder

Funding Type: Crowdfunding
Crowdfunder is the place where entrepreneurs and investors meet. The platform is designed specifically for businesses that need seed money or working capital. Consider using this platform to run a campaign.

17. Wefunder

Funding Type: Crowdfunding
With Wefunder, you can crowdfund nearly anything. And, as they say, you never know what will work. Run a campaign to raise between $50 thousand and $50 million on the platform. If you need less, explore other options.

18. Angel Investment Network

Funding Type: Angel investments
The Angel Investment Network is a platform to connect entrepreneurs and investors in the United States. Fundraising campaigns have minimum investments for high net worth investors.

19. Lendr

Funding Type: Business funding, invoice factoring, and merchant cash advances
Leverage Lendr for all your working capital needs. Apply for a working capital loan today.

Comments are closed.