Every business needs funding to get off the ground. Some business owners sell assets or use resources such as home equity or retirement accounts. Others turn to outside funders. Here are three types of funding that you might want to consider.
Local Community Banks
Your small bank that is local to your town may have funding options for your business that a larger bank wouldn’t offer. Community banks cater to small business owners, often with low-interest rates. You’ll get more personalized service from people you may know. You may also be able to work with your community bank to get an SBA loan, which could give you even better rates and terms.
Angel investors provide capital for startups. The startup offers equity or convertible debt in exchange for funding. Typically, the angel investor only provides money. It’s not a partnership. You’re still accountable to your investor, but he or she probably won’t be at your side every day pushing you forward. Yahoo got its start through an angel investor.
Also known as accounts receivable financing, if you have invoices for products and services, factoring could be a funding option that could get through a slump. Giving your clients time to pay is good customer service, but it doesn’t always fit the needs of your business. Factoring can speed up your cash flow to let you pay your bills without pressuring your clients.
Look for Funding Options
When your business is getting started and you need money, you may need to think outside the box. Be careful about giving up too much equity to family and friends. Listen to your mentors about going into debt too deeply. You can be successful, but you have to pay attention to your working capital needs.
Norus Capital has financing options for your business. Contact us today to discuss how we can help.