Aside from several other factors, the success or failure of a business relies on its funding. Given adequate funding, the business can expand, hire new talent, and get up-to-date equipment among other benefits. On the other hand, with inadequate funding, the company is at risk of shutting down if it lacks the capital to run its basic operations. Unfortunately, getting external financing is extremely difficult, hence leaving some entrepreneurs stuck. Are you finding it difficult to finance your business? Read on for ways you can effectively do so in 2019.
Government funding
Small companies are immensely beneficial to the economic growth of any country. This is among the reasons why the United States government has taken the initiative to support these businesses to grow. The government, through the Small Business Administration (SBA), extends low-interest loans to small business owners. These loans are generally easier to obtain compared to traditional bank loans with friendlier repayment terms. Therefore, you can fund your business by taking out an SBA loan in Ogden.
Commercial loans
Another way to finance your business in the United States is through borrowing from banks and credit institutions. While these loans come in handy and in large amounts, qualifying for them can be tricky for small businesses. They require a credible credit history, which these businesses may not have. Again, they need collateral that a company may not have. Hence, you should bear this in mind to ensure that you qualify for a commercial loan before applying.
Equipment financing
This method allows you to acquire equipment if you are unable to pay upfront so that you can pay later. It is an essential source of finance since your business needs equipment to run smoothly and effectively. In this case, your assets will act as collateral if you are unable to pay back. The best part is that once you repay the loan, you keep the equipment. However, assess whether the value of the machine is worth paying the interest rates.
Equity financing
Angel investors are people with the money and the time to invest in small businesses. This is an excellent alternative if you have a bad credit score or no collateral or if you cannot find funding elsewhere. In this case, you exchange equity for capital, which means that there is no loan to repay. However, before you consider this option, be sure if you are willing to share the ownership of your business with another person.
Family and friends
This is a great way to get a loan since your family and allies know you well; there is no need for a credit score. Better yet, you also do not need to pay interest. Plus, you can agree to pay back when the business has stabilized. However, ensure that you come up with a compensation contract on how you will make the payments. This makes it easier for the other party to trust you and be confident that you will pay back as agreed.
Adequate funding is imperative in the success of your business. Through government funding, commercial loans, friends, equipment financing, and equity financing, you can get the much-needed capital to take your business to greater heights.
