Start Up Funds For Small Business

Start Up Funds For Small Business

When starting a business, it is not uncommon for an owner to require additional funding, as start-up expenses can be quite high, but knowing where to obtain start up funds for small businesses can be difficult if you aren’t sure where to look. There are many resources available, including grants, loans, contracts and partnerships, and each type of funding offers something a little different.

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Types of start-up funds

  • Grants: Start-up funds for small business expenses in the form of grants do not need to be repaid. However, grants typically have strict requirements and regulations on the money. Funds that are spent on unapproved ventures can be recalled, in which case a business would have to repay the money. Grants are offered on the local, state and federal level through a variety of organizations, institutions and governments. Federal grants are generally awarded to other organizations or governments to disburse. However, state grants and those offered by non-profits, business networks or institutions are generally awarded directly to the company.
  • Partnerships: Local and state partnerships between companies, not-for-profits and institutions not only provide funding but community ties and other resources. Many cities offer a form of business networking group or council where members can network and host forums, conferences and other learning events. Sometimes member companies will trade in-house resources or possibly invest in one another to encourage community growth.
  • Contracts: Government contracts are offered to businesses who can perform certain services needed. Many environmentally-friendly initiatives are completed this way as the government contracts a business to complete the work.
  • Loans: Loans are the most recognizable form of start-up funds for small business ventures. However, loans, and the interest that accrues, must be repaid. While a loan can certainly help start a business, they can easily ruin a struggling business. Loans are common for small businesses, so it is important to research the type of loan, repayment schedule, interest rates available and options if the loan payment cannot be met. These factors will vary depending on several issues, including the lender, the borrower, credit rating, type of business and how high of a risk the lender views the borrower.

 

Resources to find funding

Now that you know to check locally, statewide and at the federal level for funding, you may still be stuck at how to find available resources. Check with your state government to find common interests for which a state department may want to fund your company. This can usually be done by visiting the state government’s website.

  • The Foundation Center provides a list of funders and grantmakers for philanthropic ventures. While the Center does not distribute funding, it does provide a network of educational institutions, centers and libraries for information.
  • FedConnect, an online portal, provides a database of federal funding opportunities to businesses.
  • FedBizOpps.gov includes a listing of government contracts available to a variety of businesses.
  • BusinessUSA allows visitors to search for resources at the state level. Resources include more than just money at BusinessUSA, as companies offer training, assistance, funding and more. Simply click on the state where your business is located to begin.
  • The U.S. Small Business Administration (SBA) provides information on grants, loans and other start up funds for small businesses.

 

Funding for start-up businesses is available in many places if you know where to look. Luckily you have landed in the right place. Fill out the information below to get instant access to our fully customized start up plan where we show you step by step what to do in order to secure funding for your company. Most importantly we also revel what not to do and how certain things you may not know can affect your funding.

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