Financing Options for a Small Business and Personal Needs

Many modern corporations like Google or Apple were initially small enterprises. They would have remained on that level if they hadn’t found funding options.

Sure, not every small company aims to be a conglomerate. And not every person desires to be an entrepreneur. But some of their undertakings or living circumstances need financial support that they won’t be able to cover by themselves.

Required investments in a firm or personal development can be significant, but they are one of the crucial factors of the future success. The quest for financing options that won’t drag you down with time is usually challenging but with a deliberate approach workable.

Easy personal loans appear as the clear choice. The last year 34% of USA citizens selected this remedy to cover their out-of-budget expenses. But is it the best option? Debts referred to the car purchases or education, according to Forbes, has passed the $1 trillion mark in 2018.

The main two clauses you should define before you step on a borrower road is a money purpose and its necessity. Any lending affects your credit scores as well as the level of stress from a daily routine. For a small business, any indeliberate financial step can be the sinking point. Being spontaneous is really risky behavior for an entrepreneur.

Once you’re definite you can move on to reviewing options that you have to get a lump sum or leastways its part. Business owners have more various possibilities to get financial support. But they must adhere too much more requirements initially to get access to them. So what selection do you have as a member of this group?

Loans and Mortgages

Although the latest debt statistics aren’t promising you shouldn’t cross out this financing option. Its main advantages are accessibility, a competitive APR and the relative scrutiny of the system by the society. But there are certain conditions you should take into account.

Banks and online providers divide loans by expenses they suppose to cover: business or personal. The last ones are easier to get, but they can’t always be spent for funding your startups. Financial institutions want to ensure money return. That’s why they need information not just about you but also about an undertaking you’re about to invest in.

This financing option gives you an opportunity to get significant amounts that you’ll be allowed to return during long-term periods. The acquiring process can be exhausting though. Its duration can reach a few months. And the number of requirements you should adhere to can excel your possibilities.

Online lenders and peer-to-peer marketplaces, that serve as intermediaries have simplified the procedure, but their reliability remains questionable.

Credit Cards

These plastic keys to cash can be a suitable way to cover recurring or occasional expenses of your business as soon as they don’t surpass the determined amount. Cash advance fees are commonly high and can overbalance your financial system.

While it’s a great financing option for business and personal needs (with the easiest access), this solution is only good as a temporary one. It’s not the best choice to mix your personal and business expenses. And constantly relying on it can distract you from establishing the stable financial basis of your enterprise.

Your or Your Circle Funds

If you make the right steps you can use your 401(k) money you have been storing over the years. It seems alluring, but take into account that the financing option is legally difficult to process and requires advisory support. Additionally, this way you jeopardize with your undertaking not only your present but the future too.

Another funding option for personal or business needs is to get into the pocket of your loved ones. With their permission, of course. But despite how supportive and eager with their intentions they are, they often don’t realize all the risks on your enterprise. You shouldn’t take advantage of this way. Always consider that money is a destructive power for relationships.

These three remedies can obviously be used also for covering personal needs. The financial solution features vary depending on their type, but the fundamentals remain the same. Before making any decision for your business explore also the options you can use only if you try to make your name in the world.


Some online platforms, like Kickstarter, can help you raise money by simply declaring an idea. If you’re persuasive enough you can receive various sums not only from your friends, but from complete strangers that have some interest in its implementation. Yet, the probability of gaining the desired amount and the period required for it are unpredictable.

Angel Investing

Some investors contribute only in enterprises on early stages of development. They support undertakings in the most crucial period that defines if ambitious startups can survive in the current environment. In comparison to crowdfunding, you have to convince only one person. But the one is much more proficient than an average Internet user and will expect from you to be a professional from day one.

Ventures and Grants

With so many examples around you can say that any startup have a potential of financial success that all involved will benefit from. Ventures are companies that invest in promising concepts within certain industries. They can serve also as advisors or even company builders thanks to their experience. The deal activity in the USA for this type of funding reached the record bar in spring 2018.

You can also get financial support from non-profit or governmental organizations that consider investments as a method to stimulate global science and business development. They can offer financial options in the form of loans, like the ones from SBA (Small Business Administration), that have more loyal conditions in comparison to banks. But to get them you should come through strict selection.

Factoring and Future Earning Percent Lending

The result you try to find the money for can ensure it while remaining on the paper. Factoring is a service that allows you to receive the money in advance you will get for your product according to estimations. Yet, it’s more a closing-a-gap financing option and can come with high fees from a provider.

You can sell not only your startup potential but also your own by offering a percentage from your future earnings. You can raise the significant amounts in exchange for a certain part of your salary during the long-term period that, however, can last a lifetime.

Supporting Programs

Successful enterprises, including transaction operators, like to share the experience not just during summits and conferences. They commonly set up accelerating programs for young businessmen. They might include financing options or help with their obtaining. For instance, PayPal can provide loans for their adventurous users defining their reliability by analyzing their service employment.

Annual Survey of Entrepreneurs reports that the financial basis of startups in the U.S. is mostly built with own or family bankroll, individual credit cards or business loans from banking institutions. Nonetheless, this data isn’t an obligatory guidance for financing your business or personal needs. But it’s a selection of funding options for your overbudget expenses if their reconsideration is a lost cause.

When choosing from other alternative financing for a small business you should check your enterprise status and its desired growth. If you dream big, you should start to establishing the network that will help you claim up the charts and develop. And experienced investors should definitely make the list of your contacts.