These days, I am often asked about how to get funding for new businesses.There is no one easy answer for this, as what is best for one business is not best for another.
There are many ways to finance a business, and entrepreneurs are known for their creativity in this arena. Most financing falls into two broad categories: equity financing and non-equity financing. Equity financing is where you give up partial ownership of your business in exchange for funding. Non-equity financing is where you agree to pay back funding provided to you from others (usually plus interest). Financing may also incorporate a combination of the two.
Where you get financing is a matter of how much you need and what you are willing to exchange. The following is a brief list of common sources of business funding:
- Non-equity Funding
- Your Funds
- Credit Unions
- Loan and Finance Companies
- United States Small Business Administration
- Community Development Companies
- Life Insurance Companies
- Equity Funding
- Friends and Family
- Private Investors
- Venture Capital Firms
Each of these methods of financing have pros and cons, and you will need to choose one (or a combination of more than one) that is best for your particular business needs.