5 Smart Financing Options to Get Funded For Your Small Business

smart financing solutions

Written by Bienvenu Mavakala

May 23, 2022

Finding sufficient funds for your business is something every startup struggles with no matter how planned you go about your business, getting financed timely is an essential concern for most new business setups.

In today’s world where everything is at the tips of your fingers through smartphones and laptops, it is not at all a task to look up all available options for your business to get funded through a loan.

Here are 5 smart financing solutions to make it easier for you to get funded for your small business.

Angel financing for small businesses:

Who does not need angels in life? And what’s better than having an angel for your business? In proper terms, an angel investor is an individual who lends out an amount of money to invest in someone’s business and increase their working capital.

Angel investors are business angels as they prefer helping new start-ups in building their capital and improving their cash flow. This loan is in return for ownership equity or a debt that is convertible. Angel financing is a loan program where an investor lends money to a small business in exchange for the business equity. This can be done with an individual or a group of business angels who collectively want to invest in a business to get its shares.

How do you find your angel investor?

Since angel financing seems like a dream of a startup business, this question is often asked. How do you find your angel investor? Well, it usually comes from the contacts that you make in the market. An angel investor could be a friend of your friend who gets to know about your startup through your friend and decides to invest in it for a part of the shares.

There is a bigger chance for you to get financed by an angel investor if they know you personally or have an indirect connection with you. An angel investor needs surety of your seriousness in the business and so it is best to keep an updated profile on LinkedIn and see what connections you can make there to find a good angel investor.

Benefits of angel financing:

Angel financing is unique and comes with its benefits. Startups prefer angel financing for its multiple benefits.

  • Provides you with a wide range of funding. While with normal loans you can have a particular upper limit for a loan, with angel financing even startups can get a good amount of loan to establish their blooming business.
  • Angel investors are usually experienced business people who can guide and help you as a startup. This is something that saves your money on taking expert advice and opinion on your business as you already have an investor who is skilled to suggest your business with their prior experience in the market.
  • Angel financing is much more convenient and easy to deal with compared to a normal business loan. The angel investor only gets to keep the share of profit that is agreed upon at the time of lending, there is no monthly payment that you need to make or any interest rate.

Crowdfunding Investment:

Crowdfunding is another type of smart financing solution for small businesses that helps new businesses in the market get help with raising capital through different investors. As the name suggests, crowdfunding involves more than one investor who is keen to support local businesses.

Crowdfunding can be termed as a fundraiser as it collects the investment amount from different people to collect and invest in a startup. This can be done through online platforms or fundraiser campaigns.

What makes crowdfunding investment better than others?

Crowdfunding has its benefits. If we talk about how it is better than conventional loans, there may be a lot to talk about, as it is simpler, easier to access the capital, and no heavy documentation goes behind it.

Various crowdfunding websites can help you with collecting investment amounts for your business.

Credit cards for small businesses:

Credit cards are undeniably a great source of financing for small businesses. There are many companies specifically catering to the financial needs of small businesses. Small business owners prefer credit cards over other loans as it is seemingly an easier way to get money and does not require a guarantee from the borrower. The credit card companies will look at the market reputation of your company and how long you have been in business to make sure you’re able to repay on time.

You can use your credit score to get credit for your business. Another benefit of using a credit card for your business is the points that add up and can be used for different purposes. For example, some credit card companies add up your points and give discounts on airfare that you can use later.

You can apply for a credit card for your small business online to save time on the application.

Venture capital (VC) for small businesses:

Venture capital investors are usually financially strong and big names in the market. Hence, it is not easy to get a loan from a venture investor. It may require you to submit a lot of details and the venture investor will make sure of certain things about your business before investing in it.

  • A venture investor will look at the size of your business and how long you’ve been in the market. Before investing in your company the venture investor will ensure your business stability by following the timeline you’ve been in the market for
  • The nature of your business and the industry you come from is also a matter of concern for venture investors. Some investors would want to invest in only a few specific categories of industry.

Small business loans:

The small business administration offers various types of SBA loans that you can benefit from. Small business loans are designed to help business startups gain enough capital for their business and make the cash flow regulated. 

Small business loans are of different types, you can pick on the type of loan that suits your business best.


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