Business Financing For Small Businesses

919 Words Aug 6th, 2015 4 Pages
Small Business Loans
Starting a business requires capital so as to run and steer the business to profitability. There are many sources of financing tailored to meet the needs of start-ups and small businesses. Business financing usually varies depending on factors such as source of funds and the size and type of business. The process of securing funds can also be problematic for most start-ups and small business because of the unwillingness of most traditional banks to provide funds to small borrowers. Here are some of the main non-banking financing options for startups and small businesses:
• Venture capitalists – most venture capitalists are focused on specific growth industries. For this reason, small businesses that are making money can tap into this form of financing to expand their businesses into the next phase of growth. Besides capital financing, venture capitalist also provide crucial business insights and leads to business owners. For example, a business owner can be advised if the product or service he or she wants to sell will be a success or failure. Most venture capitalist who lend money to small businesses offer short-term to mid-term borrowing of between 3 to 5 years.

• Grants – startups that are keen on research can apply for grants from governments and willing investors. However, grant recipients must meet all the laid down developmental and research goals. In most cases, the ideas advanced by such entities must be viable to move to the next phase of…
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