By Nwaodu Lawrence Chukwuemeka
WED, JANUARY 11 2017-This article is a Business Startup Guide – targeted to get you up and running in no time!
When it comes to funding, there isn’t a one-size-fits-all approach. Depending on where you are at in your business, what type of funding you are seeking, and the amount you need, where you will look can vary widely. We have compiled a list from a variety of places to help you research and narrow down the options that are best for you.
Loans:
- SBA loans
Small Business Administration loans are often one of the first places that small business owners in the United States think of looking for a loan, and they’re right to think this way. This can be great option if you fit the criteria. In Nigeria, the cooperative society, investment clubs and the microfinance banks are very good places to seek out loans and advances for the small business owners and startups.
- Bank loans
Though there has been plenty in the news lately about the difficulty of receiving a bank loan, this is certainly still an option, particularly for those with substantial collateral and very good credit. We also have some tips on securing a bank loan (if you will get in touch with us).
- Nonprofit microloans
Kiva is a great example of an outline portal for microloans. If you only need a small amount of money, particularly if you are a minority-owned business operating in a developing nation, working with one of Kiva’s field partners could be a good route.
The several cooperative society organisations and other non-profit micro credit associations are a great options for the small business owner looking for a soft business loan.
- Small Business Lending Fund is a dedicated government fund that provides capital for small business loans through specific lenders in each U.S. state, and in Nigeria facilities from BOI (Bank of Industries), and other small business support programmes. As well as the government YouWin programme and others in that line.
- Economic Development Agencies in your area can assist with loans and grants. Each state and some local governments have one. A careful look at the 2016 budget will reveal more and be taken advantage of by any serious entrepreneur and startup.
- The macroeconomic policies and growth strategies of the present government provides avenues for facilities to small businesses; especially it applies fairly specifically to those who are running technology or research based businesses.
- National Association for the Self-Employed (SMEDAN and NACIMA, etc), offers grants and scholarships to those who are self-employed.
- Government Small Business Grants are often industry specific, but there is a lot available. The Bank of Industries (BOI) offers several options of facilities to small business owners and business groups; they have convenient area on their website to conduct research about which may be right for you.
Alternative Lending Sources:
Alternative lenders are institutions that provide loans or lines of credit as an alternative to traditional bank loans or the government.
- Lending for small businesses from business and investment groups, trade associations, cultural unions and clubs, and the microfinance banks, etc.
CrowdFunding:
On crowdfunding websites, you create promotional materials and set up a page for your business or project to accept financial backing from those who visit the site. Each site varies a little, so be sure to read the fine print as you decide which is right for you.
- Some sites (startup support sites) have started the option of offering fundraising campaigns without end dates.
- Fundly has a social bent and is good for nonprofits.
- Kickstarter is currently the world’s largest crowdfunding platform.
- Fundable is more specifically aimed at small businesses.
- Venture Capital:
Venture capital is really only an avenue if you fit the specific criteria. You will need to read up the Tips for Finding Venture Funding to position yourself to take advantage of this option.
The Funded is a site for those who have received venture capital to share their experiences and ratings with others looking at the same option.
- Angel Investment:
Angel investors can be a great financing option for the right business. You can read up tips on securing angel investment and the Angel Capital Association are good resources when looking for angel investment. Some websites matches investors up with small businesses seeking funding, and AngelList lets you browse investors.
Bootstrapping:
Bootstrapping: the time-honored tradition of doing basically any and everything you can think of to find money to use in your business.
16 and 17. Friends and family –
This is a tried and true method — the people in your life often believe in you and will put their money where their mouth is. Get in touch with some suggestions on navigating fundraising from friends and family.
- Business line of credit –
This is an option for those who need cash quickly and have fairly good credit.
- Contests –
Seriously, if you have a great business idea or maybe you’ve perfected your pitch, enter a contest. You never know!
- Service or product presales –
I have a friend who helped pay for massage school by pre-selling massages—she simply offered her massage services for after she would become a LMT (licensed massage therapist), in exchange for a contribution to her tuition. Once she graduated and got her licensure, those who contributed had a “pre-paid” massage waiting for them, which they could schedule at their convenience.
21 and 22. Using your savings/selling assets
Although this is also known as “betting the farm” and can certainly be risky, it is an option to use your personal savings and/or sell one of your existing assets and use that money to fund your business.
- Using other income to fuel your business:
As we have written previously, many people have a side hustle until they are able to go full time in the direction of their own business. Renting out a room in your house using a popular site like air bnb, Chiki.com, Konga, etc, is a great example.
Industry Specific:
Depending on what kind of business you are starting or running, there could be funding from an industry-related fund or organization. Here are two examples:
- Whole Foods Local Producer Loan program:
If you’re running a business that provides locally grown and created food-based goods to your area, you could apply to receive funding from Whole Foods.
- Franchises:
Some franchises, such as Matco Tools, etc, offer in-house financing to incentivise those looking to start a franchise with their company.
- Microloans –
- MicroAid
We’ve got in depth information here, but Microaid is an organization that can help you get an extremely low-budget micro enterprise off the ground.
- The UK government has a section of their website dedicated to business finance and support.
- The Canadian government has a separate website providing information on the Canada Small Business Financing Program and government grants (specific criteria often apply).
Have you successfully funded your business? What method did you use? If you had to do it again, would you? Or would you try a different method?
A good business plan can nake all the difference when it comes to securing funding from a creditor or an investor; therefore learning to prepare it is key, hence the use of the software – LivePlan makes your business more successful.
If you are writing a business plan, you are in luck. Online business planning software makes it easier than ever before to put together a business plan for your business.
As you will see whenever you check it out online, “LivePlan” is more than just business plan software, though. It’s a knowledgable guide combined with a professional designer coupled with a financial wizard. It will help you get over the three most common business hurdles with ease.
Check it out and take a look at those common hurdles, and see how producing a top–notch business plan sets your business up for success.
Send an SMS or Call to contact us for more details and training opportunities.
– Nwaodu Lawrence Chukwuemeka (Ideas Exchange Consulting)|nwaodu.lawrence@hotmail.co.uk (07066375847).
