The BizFilings blog covering business tips and trends.
Is Capital Gone? Finding Funds Part Two
Published on Apr 24, 2009
Check out 'Is Capital Gone? Finding Funds Part Two' at 'Time to Start Up,' the small business blog by BizFilings.
So you're looking for some alternatives to the bank? You're not alone. There are other places you can go for capital to start, grow or invest in your business.
In our earlier post "Finding Funds" we discussed Peer-to-Peer lending and Credit unions. Today we'll take a look at another two options that often get over-looked in the quest for cash.
Small Business Grants and/or Community Programs
Just about every larger sized city has a small business development center, and this is a good place to start to research any kinds of business grants you may qualify for. There are some national government grants available, as well as state specific grants. You may qualify for additional options if you are a woman, a minority, or your business will benefit an economically under-served area.
Visit business.gov to search for grant opportunities that will be right for you.
Even though investors may be a bit more cautious in these economic times, they are not blind to a good opportunity when they see one.
An angel investor is usually an individual, or an investment group, that provides capital to a small business in exchange for ownership equity. Angel investors differ from venture capitalists in that they usually are investing their own money and will consider a lower dollar amount investment. Venture capitalists tend to invest a pool of money (a fund) they are managing for others, and normally look at investment opportunities above $1 million.
One caution - angel investors will be looking for an excellent rate of return on their investment, given the risky nature of investing in a start up company, and may want to know how you intend to provide that. But overall, the pros outweigh the cons when it comes to angel investors. You can research some of your options online at several sites and with the Angel Capital Education Foundation.
Hopefully these four new options for you to investigate (beyond the standard bank loan) will help you through a tough time or allow you to continue to grow. Remember to be diligent and have a plan, and your business will succeed!