Different Options for Business Funding

The era of solely funding your own business has been long gone. It is still an option if your savings our enough for your dream business but if you are not yet ready to finance your idea alone you can look at different options for business funding.

We are lucky we are living in a generation where we are presented with business financing options we can select from. Funding for research about what option will work best for your start-up business is the key to helping you begin on your entrepreneurial journey. Take notes as we list the different business funding options available for inspiring businessmen below.

Debt Finances

Banks are still the most popular location for entrepreneurs looking for finances. They can provide debt financial support that entails either a line of credit or fixed loan for businesses looking for ways to keep their operation going. They will require a business outline and collateral for your property.

Credit Cards

It has been reported by Small Business Credit Card Survey that more than 86% of small business owners have taken advantage of credit cards during the beginning phase of their business. 1.6 million employment opened as a result of the boom of credit card lending in a matter of 5 years. Basically, more than 90% of small business owners are using credit cards.

Business Grants

If the business you are looking to build is related to scientific research and development, you can avail an R&D funding from Small Business Innovation Research program. Grants are awarded in a competitive basis and you might find yourself against hundreds of other applicant vying for that same grants for research.

Microloans

For borrowers who can’t apply for credit cards because of unpleasant credit score, Microloans are the best option for them. It has been reported by Micro banking Bulletin Issue #19 that this option help entrepreneurs to increase their business income.

Unsecured Working Capital Loans

In contrast with microloans, unsecured working capital loans would be the perfect option for borrowers with high credit rating. But with this option, you will get a higher interest rate for the loan and the requirements will be as stressful to prepare as bank loan applications.

Business Loans



Business loans are solution to current and larger financial needs. You have the option to loan for a small amount repayable in short period of time just to meet the current financial needs of business or you can ask for a larger amount of loan repayable in a longer timeframe for more expensive loans.

 

[Dhruv Bindhani]

The days of sole self-funding for businesses are largely over, with a plethora of financing options now available for entrepreneurs. Researching the best fit for a startup is crucial for a successful entrepreneurial journey.

Debt Financing​

Banks remain a popular choice, offering debt financing through lines of credit or fixed loans for ongoing operations. They typically require a detailed business plan and collateral.

Credit Cards have emerged as a significant source, with over 90% of small business owners reportedly utilizing them, especially during initial phases. Their widespread use has even been linked to significant job creation.

Microloans provide an alternative for borrowers with less favorable credit scores, helping entrepreneurs boost their business income. In contrast, Unsecured Working Capital Loans suit those with high credit ratings, though they come with higher interest rates and demanding application processes, similar to traditional bank loans.

Business Loans broadly cater to both short-term and larger, long-term financial needs, offering flexibility in repayment periods based on the loan amount and purpose.

Grants​

Business Grants, particularly R&D funding from programs like the Small Business Innovation Research (SBIR), are an option for ventures in scientific research and development. However, these are highly competitive, pitting applicants against numerous others vying for the same funds.