How to Get Financing for Your Small Business
Of the 1.17 million businesses in Ontario, approximately 1.14 million of them are small businesses. This is an extremely large number of businesses, many of which required some sort of financing at one point. It can be difficult to obtain financing as a small business. However, there are a number of approaches and strategies that small business owners can use to obtain financing. These approaches could be the make or break for your small business.
Strap Up Your Boots
If a business is unable to acquire a loan, this often leaves most small business owners with the bootstrapping approach. The bootstrapping approach is when the company is funded by the owner. This is often just to get the business off of the ground, as it isn’t a solid long-term business model. Often times, bootstrappers run their business on the side while working a part or full time job. This allows them to provide for themselves while building their business.
Get a Small Business Loan
It can often be difficult for a small company to get a loan if they have little or no credit or have not been in business long enough to satisfy a lender with past performance. If your bank will not consider lending you the money you will need other options to investigate.
Fund Through - provides working capital advanced from your unpaid invoices.
Lendified - online lender for small business.
Clover Capital/First Data - working capital advanced from future credit card sales.
Get Funding From The Crowd
Although it is a newer approach, crowdfunding can be a great way for small business owners to get on their feet. Crowdfunding is basically advertising a potential or new business and asking the masses to support it. Crowdfunding can be done through a number of platforms and has proven itself successful for a number of businesses. Small business that offer unique, quirky, or innovative products seem to do well on crowdfunding platforms.
Starting a small business comes with big responsibility. There are a lot of ducks that you have to get in a row, one of them being financing. There are a number of options that a small business owner can choose from, including bootstrapping, crowdfunding, or a small business loan. However, these are just a few of the options; it is important to do as much research as possible before committing to anything.
The first step to financing is to ensure that your financial statements are accurate and up to date. Cash Flow Statements and Projections for your business are often requirements from lenders. That is where we can help. For more information on how to get financing for your small business, feel free to contact Catalyst Business Services.
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