You can start a business on a shoestring. Borrowing money isn’t a necessity and often times isn’t the smart thing to do. That’s why I don’t discuss it as much as some of you may wish. Okay. I understand. You need and deserve resources. But before I get into sources of funding for your business, let me clear up one very important thing.
There’s a big difference between good debt and bad debt.
Investing in your business is good debt. Buying that bright-shiny-object-you’ve-had-your-eye-on-for-a-while-but-weren’t-sure-you-should-indulge-in, represents bad debt. If it doesn’t do anything to contribute to your financial health in the near or distant future, that’s bad debt. A luxury that doesn’t help move you forward is not worth it, particularly when you’re building your business.
I’m not against financing. I’m simply against poor choices / bad decisions / short sightedness. Before you jump into business financing, think long and hard about it. And do your due diligence!
Here are sources of business financing:
Government Small Business Loans – Check with your local government agency. There are some government loans you can apply for on a local, state, and federal level to receive the money you need to start or grow your business.
You could get a small micro loan, disaster relief loan to rebuild your business from a natural disaster or a simple short term lending loan. You might even be able to get a loan based on your geography!
Veteran Loans – If you’re a military veteran who served in the armed forces, you may be eligible for a veteran loan to use on your small business. Check with your local veteran’s chapter to apply and see if you qualify for a loan and how much you might be able to get to use on your business.
Small Business Loans – The Small Business Administration offers small business loans and resources to those who qualify for a loan. The SBA works through private financial institutions to offer some of these loans at a low interest rate if you qualify.
USDA – If your small business is in the agricultural industry, then you may qualify for a small business loan. Check out the USDA website to find all of the information you need about their small business loans and what information they need when you apply.
Women – There are many small business loans that cater to owners who are women. Some are offered through your state while others are offered through small business corporations, organizations and non-profits.
Minorities – There are some small business loans provided to qualifying minority groups. The MBDA (Minority Business Development Agency) works with minority groups and evaluates their situation to determine if they can apply for a small business loan. They also offer many tips and resources to help you get started with your business venture.
Grants – Grants are available through the government, corporations, non-profits, and other organizations. This is money that doesn’t have to be paid back, but with some grants, there are specific regulations on how the funds can be spent.
There are many small business loan resources available for almost any situation. Do your research. Check all of your options. Then decide first and foremost if this really is the way you should go. If the answer is yes, carefully and diligently select the resource that will work best for your business needs.
Talk to me.
What are some circumstances that you believe require funding for your business? Are there ways to get around needing a financing source? Have you already borrowed money? If so, how did that work for you? Have you ever wished you hadn’t financed part or all of your business? If so, why?
Let’s talk about it…