You’ve got a great idea for a start-up and are ready for the next step. But first there are some serious decisions to be made: Will you work from home or rent a space? Hire employees or go solo for a while? And perhaps most importantly, how will you fund your new business?
Landing sufficient funding to get a business off the ground can be the most critical issue for someone in start-up mode. Many of us have seen the struggle in action on TV shows that help small business owners obtain funding. (Think Shark Tank.)
Luckily for the camera shy (and everyone else who isn’t sure where to start), there are other ways to fund your small business that don’t include raiding your 401(k) or hitting up friends and family. While a bank loan is always a possibility, today there are more alternative funding sources than ever.
Four alternative funding sources
- Fundable: This crowd-funding company features a fairly simple process from start to finish: Create a profile on the Fundable website, spread the word about your product and then open it up for funding. Businesses receiving crowd funding on Fundable have raised anywhere from a few thousands dollars to well over a million. You can choose to raise funds by granting either rewards (selling your product or service) or equity (offering shares of stock in your business).
- SBA Microloan Program: You’ll pay many kinds of taxes as a business owner. So why not let the government help your start-up get off the ground? This branch of the Small Business Administration (SBA) provides loans of up to $50,000 to help small businesses start up and expand. Loans are allocated through a local SBA intermediary. (There are some in each state.) Small business owners may be required to fulfill training or planning requirements in order to be eligible for a loan.
- The Awesome Foundation: Looking for a little funding with no strings attached? It’s actually not impossible. The Awesome Foundation awards $1,000 grants each month to projects in need of funding. They have locations around the world. Each chapter has a board of about 10 members who give $100 each month. That pool of money is then awarded to one lucky small business owner. The Foundation doesn’t require a stake in your company or any other concession in exchange for funding.
- ACCION USA: ACCION USA is a microfinance organization that has lent over $272 million to small business owners since its inception in 1991. They offer business loans up to $50,000 depending on the status and profitability of your business. There are four different levels of funding available. Relatively new start-ups can receive up to $10,000 while profitable businesses that have been in operation for six or more months are eligible for up to $50,000.
One you cross the funding hurdle, don’t forget about business insurance to protect your new enterprise. Contact an insurance professional like a local Erie Insurance Agent to learn more about affordable coverage that gives your business the protection it needs.