There are several options available that can be helpful when interested in funding a small business.
Factoring is a great example. Factoring enables you as the entrepreneur and/or business owner to sell the business accounts to a third party in order for immediate cash. Certified Business Loans advises that factoring is ideal for a business that is consistently growing rather than declining in revenue.
Another option to consider when figuring out how to fund a business is looking at retirement accounts. Taking money from IRA or a 401(k) can be risky but it may be an ideal option if done wisely. When considering using IRA or 401k look for an interest-free 60-day loan. There will be no fees to worry about if it is paid back in that time frame.
Peer to peer lending is another option when trying to find a way to fund a business. There are online sites that make it possible to get funding from individuals you may not personally know. Lending Club and Prosper.com are examples of sites to find funding. The amount of funding can depend on your credit, the economy, length of loan needed, and overall reasoning behind the needed funding.
Crowdfunding is another option available to consider when starting a small business. Crowdfunding allows other individuals to invest in the cause of the business. Individuals can invest in the cause of the business in exchange for something. The money is not necessarily repaid. Instead, individuals who invested in the business and its cause could receive rewards. The rewards may include receiving some products when first put on the market. Another reward may be having one of the products be named after that funding individual. Kickstarter and IndieGoGo are sites that support Crowdfunding.
Microfinancing may be an option that is more up your alley way. Microfinancing is associated with small loans in the business world. When using microfinancing small loans can reach up to the amount of $10,000. This type of funding is gaining popularity. A microfinancing loan is based on experience, desire to succeed, sales, and the opportunity to thrive in the market. Microfinancing is a great option for acquiring a small sum of money for business funding.
Finding funding through your supplier and/or wholesaler is also a route you may want to consider to obtain funded money. If you are considering taking this type of approach it is best to work together with a local and/or smaller supplier.
Sometimes winning money from a competition or a contest can contribute towards a solution. Take the time to research some business competitions or contests. There is a great deal of nationwide and local competitions and/or contests offering some generous amounts of money. Some of the competitions and/or contests include The GE Ecomagination Challenge, Amazon Web Services Start-Up Challenge, and MIT $100K Entrepreneurship Challenge.
In conclusion, there are several advantages and funding options to consider when starting and/or running a small business.