If you are looking for ways to grow your business, you may need extra funding. This can help you cover expenses while you are expanding and growing your business. However, it can be difficult to get the funding you need. Loans can be hard to qualify for, especially for small or new businesses. Continue reading to learn some important methods for funding your business.
Bootstrapping
Bootstrapping is using your own money to fund your business. You might use a personal loan, a credit line, your savings, or a combination of any of them. The good thing about this is that you don’t have to give up any equity or ownership in your business, and you can make decisions without being held accountable to other people. Your responsibility is to focus on your business and pay back any loans that you take out.
Take Out a Bank Loan
Another way to fund your business is to take a bank loan. The bank will set the terms and you need to pay it back on schedule. You will pay interest on the loan and they will require documents, such as a business plan and other papers. You may be asked to give a personal guarantee on the loan as well.
SBA Loans
You can also apply to the Small Business Association for a loan. This type of loan is more accessible than others and you apply through a local bank to this program. If you want to take this kind of a loan, you should go to the Small Business Development Center and they will help you get started.
Financing From Friends and Family
You can also borrow money from friends or family, which can be a loan or you can give them equity in return. You need to handle this delicately and be sure to share your business plan and your growth plan with them. Make sure that you consult your lawyer to have a formal agreement drawn up. It can be tricky to mix business with friends or family, so be careful if you go this route.