Have you ever thought about turning your passion project into something profitable? That’s how many entrepreneurs actually got started on the path to owning their very own business. That being said, starting your business can be tricky if you don’t have the funds on hand to get started. For many new entrepreneurs, the struggle of finding a way to finance a small business is the leading cause of failed businesses. Luckily, Huntington Group is here to help you and your business find a path to financial success.
Apply for a Bank Loan
One of the most common ways that entrepreneurs turn to when they want to finance a small business, are bank loans. When applying for a bank loan, business owners will sit down with a banker and ask them for a lump sum that they can use to purchase start up equipment, make payroll, or to purchase inventory.
When you apply for a loan, the bank will run your credit score or your Employer Identification Number (EIN) to determine if you are eligible to receive a business loan. This is a good solution if you have good credit and proof of income to help guarantee your repayment of the bank loan.
Use a Credit Card
A bank loan is a one-time loan that the bank gives you to fund your small business. A credit card on the other hand is a revolving line of credit that you can always use. Using a credit card to finance your small business is a great way to make sure that your smaller bills and expenses are always paid on time.
Credit cards may not have as high of a limit as a traditional bank loan would have, but it’s a great way to fund your business if you don’t have the means to apply for a traditional lump sum loan.
Crowdfunding is a popular way for startups to find working capital by asking their family and friends (and general supporters) for small donations until they have enough money to finance a small business.
Typically, crowdfunding endeavors are creative projects that need a fixed amount of money to be accomplished. For example, a musician needs start-up money to pay for studio time so that they can record and release an album. They may turn to a crowdfunding website and offer to release exclusive content to those who help fund their project.
Find an Angel Investor
A popular method of raising money, especially for tech startups, is finding an Angel Investor. An Angel Investor is someone who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. Angel Investors are called angels because they tend to give support to businesses at the very beginning, when most investors are not yet willing to back the business with financial support.
Secure a Small Business Administration (SBA) Secured Loan
The Small Business Administration (SBA) is a government agency that provides support to entrepreneurs and small businesses. The Small Business Administration provides financial support in the form of secured loans to small businesses that qualify. Generally speaking, they will secure loans for businesses that have exhausted just about every other option for financing a small business.
To learn more about how to get your business off the ground, contact Huntington Group. We provide our clients with the highest quality financial services available.