Whether your startup is already ready to expand, or will sometime in the future, it’s best to be prepared. Read this to learn the best options for funding business growth.
If you run your own enterprise, chances are your goal is to thrive and, eventually, expand. Whether your startup has already reached this phase or will sometime in the future, it’s best to be prepared. Here’s an overview of options for funding your business’s growth:
One option for funding is to take on a business partner. Per Entrepreneur, this relationship is a mutually beneficial alignment of resources. For example, an artificial intelligence software startup could partner with a mainstream automaker. The partnership would fund the startup’s development of the technology with the goal of implementing it in future vehicles. The automaker, in turn, would benefit from increased sales of these high-tech models.
A more contemporary source of financing corporate growth is crowdfunding. This term simply means using the internet to advertise your business venture, and to secure small amounts of money from multiple sponsors. Kickstarter, AngelList, RocketHub and Crowdfunder are just a few popular sites to consider.
Small-business grants are another route to explore. Per NerdWallet’s Jackie Zimmerman, there are several sources for these grants. Some corporations — like FedEx and National Association of the Self-Employed — provide grants for small businesses. Your state and community might also offer specific loans for your enterprise. Zimmerman recommends checking out the Economic Development Administration’s website, as well as the Small Business Development Center in your region. Make sure to investigate federal sources of funding for your business. Grants.gov supplies a database of available grants. You can also visit GovLoans.gov for more information on the types of loans the government sponsors.
A variety of grants help foster entrepreneurial growth along demographic lines. If you’re a female business owner, check out the following potential funding outlets: Amber Grant, Women’s Business Centers, The Girlboss Foundation Grant and Eileen Fisher Women-Owned Business Grant. If you’re a military veteran, look into Warrior Rising. If you identify as a minority, contact your local Minority Business Development Agency business center. Operation Hope’s small business empowerment program and SBA 8(a) program are two additional resources to explore.
Inventory financing has many names, like short-term business loans or business credit, but the principle is the same. Investopedia’s Will Kenton defines, "inventory financing" as all of these names and more, as long as they provide you with the money you need to buy products for sale. The inventory you purchase with this financing is the collateral for the loan, which means these financial tools are usually only a resource for retail businesses. According to Kenton, inventory financing is a good funding source for your business when your suppliers need payment for goods before you have time to sell them in your store. If you’re looking to grow your business by adding a new line of products, or you are looking to start building up seasonal inventory, talk to your lending institution to see what your options are.
Consider utilizing these funding sources to finance your business’s growth. That way, you can focus on celebrating the expansion instead of stressing about how you’re going to pay for it.