One of the most common questions from small business owners is how to secure more funding. This post covers simple steps business owners can take to secure capital or leverage funding alternatives. Click the image below to watch full video or keep scrolling to read more.
Legitimize Your Business
The first step to getting funding is registering your business with the Secretary of State. An LLC is most common, depending on the size, the actual functions and the capabilities of your business.
Regardless of your particular entity, a properly registered & legitimate business is one of the first things that lenders, investors or grant providers will look to confirm before approving funds. Other criteria include having a DUNS number, phone number, and business address registered with the state where you do business.
Traditional Methods for Obtaining Capital
Grants
You can find nearly anything on google, and grants are no different. When researching grants, be specific. Search for grants that match your situation. A few examples include grants for minority owned businesses, disadvantaged businesses, or businesses owned by women.
You may feel a little bit overwhelmed by the idea of applying for a grant, but in most instances, companies and organizations want to give this money away! Put yourself out there, take a chance on yourself and do the research so that you're able to take advantage of free money available to you.
Line of Credit or Traditional Loan
Getting a line of credit or a traditional loan from a bank is a great method to go with if that is feasible for you in your current situation. However, as a start up, most banks will base the amount of your loan on your personal credit and debt to income ratio. Based on these factors, it may be helpful for you to look at a few other alternatives.
Alternative Funding Leads
Small Business Development Center (SBDC)
Reach out to the Small Business Development Center in your hometown to let them know that you are a start-up business interested in expanding. The SBDC can connect you with a counselor who will walk you through the steps of legitimizing your business, increasing brand awareness, and obtaining alternatives for funding. They will help you with everything from drafting a business plan (which is necessary if you are looking to get a traditional loan for your business) to telling you about different federal and state grants, loans and funding that specifically helps small businesses. SBDC will also get you properly registered with other federal and state organizations such as the Small Business Administration. Such registration comes with educational seminars on funding and visibility to special loans intended to help small businesses who would not otherwise qualify for traditional loans or lines of credit.
Urban League
Another helpful resource is the Urban League. The Urban League is excellent for providing information about funding for registered, minority-owned businesses. Aside from traditional funding, organizations like the Urban League provide pertinent information about grants for business essentials, office equipment, free training, and other technological advancements that can take your business to the next level.
Chamber of Commerce
Utilizing your local Chamber of Commerce is another way to build relationships with others who can share the knowledge regarding funding processes and economic development initiatives that may benefit your business.
Industry and Membership Discounts
If you can't necessarily find funding or you don’t qualify for grants or loans, look into industry and membership discounts that can help you save when purchasing business essentials. Over time, these discounts can put a dent in your out of pocket expenses.
PPP Loans
While available, PPP loans are another resource for small businesses. To get started, sit down with your accountant or a business professional like a banker, to find out if you qualify for PPP loans and the steps necessary to get started.
Bootstrapping
Bootstrapping your business is always a funding option. Although tough, it is not impossible to use your own funds to grow your business. For example, you could dedicate a portion of your earnings from other employment to business growth. You could also set a target sales goal for your business which is specifically geared toward a particular business expense.
Networking
Finally, don’t forget the power of networking. The more you form quality relationships with other people, the more you'll learn about key funding opportunities.
Case and point - I recently learned about a program that specifically helps small businesses hire displaced workers through organizations like the Louisiana Workforce Commission. Through this program, displaced workers can be matched with businesses. These workers are then paid through federal funding at little or no expense to the business. I would not have known about this gem without networking.
Stay Connected
I hope this information has helped you in some way, and serves as motivation to keep going! If you have a business that you are growing right now, understand that the process is just that, a process. Growth and success are very incremental, but you'll get there one step at a time if you just stay focused, stay disciplined and don't give up. Have additional questions? Book your 30 minute consultation to discuss your business needs.
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