Three Ways to Get Funding For Your Small Business

For new start-ups, as well as small businesses that have already been in operation for months or years, finding sources of funding is one of the greatest challenges that small business owners will inevitably face. Many potential entrepreneurs avoid starting businesses all together because of the daunting task of finding sufficient funding. Here are three of the most reliable sources of small business funding that you can rely on even when economic times are tough:

1. Do it yourself – or with the help of a business partner

Using a combination of money you have saved up and equity you have in personal assets is one of the best sources of small business funding because you maintain complete control over the money that goes into your business. If you can’t afford it, one approach used by many successful small biz owners is to split ownership with someone who already has a strong history of entrepreneurship and is able to offer funds to help start your business. Not only does sharing the burden of funding your business with a business partner give you more flexibility over how your money is spent, but if your partner is already well versed in running a business, he or she can offer important advice in areas other than just finance.

2. Grants

Although they are very hard to obtain, grants are one of the best ways to fund a business in a bad economy. The U.S. government provides an entire department to grants, which provides funding to individuals as well as small businesses. One reason small biz owners love grants is because they are essentially “free money” – they are one of very few funding sources that come with no interest.

3. Business Cash Advance

Getting a business cash advance, which is also known as a “merchant cash advance” or “credit card factoring” is a process by which a financial lender advances your business with a certain amount of cash which is calculated based on your financial history and how many credit card transactions you process each month. Then, you repay the money that you borrowed by paying back a fixed percentage of your future credit card receivables. While getting a cash advance tends to imply that the money advanced to you will be expensive, many business owners appreciate that the funding can be made available in only a matter of days. Furthermore, it is much easier to qualify for a merchant cash advance than it is for a traditional loan from a bank.