OK, so you?ve got a local business plan. Now what? When it comes to small business funding, there are many ways to raise capital. Read on for five ways to raise money for a business.
Start-up Financing
This is the first influx of funding for your local business. There are a multitude of ways to get start-up financing. Some local business owners raise capital by selling off assets (think old jewelery, time-shares, pool tables) or borrowing money from friends and family. Other options ? like borrowing against your home or opening a small business credit card ? take more self-discipline.
Business Loans
When it comes to loans for small business funding, options seem endless. Microloans, for example, are available from private, nonprofit intermediaries. Asset-based loans help you land small business funding with things like accounts receivable and inventory. Bank-term loans are the ?oldest trick in the book? and the most reliable. SBA.gov has a great online resource for small business loans.
Venture Capital
Venture capital can come from many places. Federal Government venture capital comes from companies licensed to fund local business owners who have been denied because of social or economic disadvantage. Institutional venture capital comes from professionally managed funds that have at least $25 million to invest, but this is reserved for high-growth companies.
Investors
Theoretically, you just need a wealthy individual who believes in your mission. Typically investors look for companies that have high growth potential and either a synergy with their own business or are competing in an industry in which they have already succeeded.
Incubators
These are basically like a college campus for businesses. Incubators house several businesses at once and offer residents perks like reduced rents, shared services and access to financing. They?re a good path to capital from angel investors, state governments and economic development organizations.
As you can see, there are many different ways you can raise money for your business. Keep in mind, though, that no matter if you opt for an investor or venture capital, or even a little of both, it?s best not to rush into your decision. Take your time and weigh your options until you?ve determined which type of funding will best meet your current needs and your long-term goals.
Tell us: What do you think is the best way to raise money for a business?
Source: http://www.business2community.com/finance/how-to-raise-money-for-a-business-0274110
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