Tips on how to raise capital for your small Business

When first starting out, you probably relied on bootstrapping or loans from friends and family. Now, your business is positioned to scale, but there’s one problem: You need more capital. If you’re looking for different ways to raise more capital for your small business, you’re not alone.

In 2023, small businesses in the U.S. borrowed $52.4 billion from the Small Business Administration (SBA). That’s more than several countries’ GDPs and doesn’t even account for other lenders’ loans.

We’ve worked with over 300 small businesses, and I can tell you firsthand that bootstrapping does work, but it’s much slower, and often speed to market is the key to success. That’s why funding is so important.

Tips on how to raise capital for your small Business
Tips on how to raise capital for your small Business

What’s interesting is that a lot of business owners don’t consider all of the funding options they have available. Here are some you should think about:

Government Grants

In my opinion, one of the most underrated funding opportunities for small businesses is government grants. Unlike most loan options, government grants are awarded by the U.S. government and do not have to be paid back. However, they involve strict criteria for applicants, and it can be quite an extensive application process.

Even though it can take some time and a lot of paperwork, the payoff can be worth it if your application is accepted. The two main types of government grants are federal small-business grants and state or regional small-business grants.

Another lesser-known option is corporate small-business grants. A growing number of large companies with a philanthropic mission offer small-business grants to smaller companies that align with their vision and values. While most corporate grants are awarded to nonprofit organizations, there are some available to for-profit businesses.

Basic Business Loans

The simplest option to secure capital for your business is through a basic business loan.

SBA loans typically offer the best rates and terms for small-business loans. To qualify, you typically need to meet certain criteria, but if you don’t, there are many other lenders you can reach out to.

Frank Yeboah

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