Exploring Funding Options and Strategies for Small Business Success

Exploring Funding Options and Strategies for Small Business Success

Today, there are many ways to finance a small business other than using one’s savings. Other sources for small business funding include traditional bank loans, and tax incentives, among others. Whenever small businesses struggle, they can also obtain support from the government or the private sector. Such help can be in the form of loans, grants, or a leg up to boost a small business during a crisis. Depending on the qualifying factors, small businesses can obtain funding from multiple sources.

Bank Loans are the most popular funding option for small businesses. Before applying for a loan, the business owner ought to research the conditions that come with such a loan to ensure that the business can settle it comfortably at a later date (Malika, 2015). Small businesses with a close relationship with a bank are more likely to obtain a loan compared to new customers. Banks are well suited for small businesses because they do not demand a share of the business, but loan processing is hectic and time-consuming.

Another option for small business financing is crowdfunding. The exercise involves an online collection of money to finance a business from the general public or peers (Malika, 2015). Crowdfunding is most suited for businesses that can attract attention and have time because the exercise usually takes time.

There are also business angels who offer funding in exchange for a share of the business. Such investors either work in a group or offer individual assistance to the business. Apart from providing financing, the investors also offer advice and guidance to help the business succeed. The problem is that a proprietor will lose some control of the business to wealthy investors.

Also, governments offer grants to special interest groups seeking to start or expand their businesses. The grants are mostly offered during crises to keep businesses afloat. Areas such as technology-focused businesses also benefit from most grant offers (Marri et al., 2011). Unlike most other sources, grants do not attract interest charges.

References

Marri, H. B., Nebhwani, M., Sohag, R. A., Marri, H. B., Sohag, R. A., Memon, S., & Memon, A.             G. (2011). Study of government support system in SMEs: an empirical investigation. Mehran University Research Journal of Engineering And           Technology, 30(3), 435-446.

TABERKANE Malika. (2015). New Approaches to SME and Entrepreneurship Financing: Broadening the Range of Instruments. https://www.oecd.org/cfe/smes/New-Approaches-SME-full-

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Funding a Small Business

The purpose of this discussion is to identify the types of funding available to the small business owner and methods for obtaining this funding. Funding for small businesses can make or break a start-up organization. Important aspects of funding cover payroll, accounts payable, and maintaining inventory. A lack of funding can have a serious effect on a business. What happens in an organization when funding is no longer available to enable the completion of a project or to obtain materials to complete the job?

Exploring Funding Options and Strategies for Small Business Success

After completing the readings from this unit’s studies and viewing the media scenario, Funding the Business provides an additional Internet resource discussing the types of funding available to a small business or start-up organization. Discuss and analyze three types of funding available to the small business. Consider elements beyond the written definition including starting the business with no debt. The types of funding can go from personal savings all the way through venture capital. Consider the advantages and disadvantages of each type of funding. Remember to use in-text citations when paraphrasing or using a direct quotation from your article in the discussion. Proper formatting of in-text citations can be found at In-Text Citations, found in the Resources