Finding Small Business Funding Ideas Online

Exploring Small Business Funding

Before you apply for grants and loans, you should know how much your small business needs from the start.  You cannot ask for a blank check from a government agency, corporation, or financial institution.  As such, you should develop a 12-month budget that addresses all your costs without dipping too deeply into your own pockets.  Depending on your business, your biggest expenses may come from wages and benefits for employees.  You also need to cover everything from property investments and production assets to office supplies for your staff.  After completing your 12-month budget, you are ready to seek financing for your small business. 

You should exhaust other sources of investment funds before proceeding into the world of grants and loans.  Your personal savings, checking, 401k account, and investments can be leveraged to keep your small business alive.  It is also important to consider loans and investments from your friends, family members, and colleagues in your small business.  You should also consider creative methods of generating quick revenue to pay for lesser expenses in your business.  From clearance sales at your business to garage sales at your home, you may have more money within your current holdings than you think.  Small business owners who exhaust all these options and need more sustained financial assistance should search for funding ideas online. 

Small Business Administration®

A good starting point for your search for funding ideas is the Small Business Administration® http://www.sba.gov/.  This federal agency was opened in 1953 to assist in the continued growth of the American economy after World War II.  The Small Business Administration® is the primary resource for investors, entrepreneurs, and business experts interested in strengthening the economy.  Visitors to the agency's website discover checklists, grant information, and articles written in plain language.  To get started on brainstorming funding ideas, you can head to the Financial Assistance page at the Small Business Administration® website. 

To reach the Financial Assistance page, you can click on Services and begin to gather ideas on business funding.  This page breaks down funding ideas to borrowers as well as prospective lenders to eliminate wasted clicks.  By clicking Borrowers, you will see a list of small business funding ideas used by entrepreneurs nationwide.  The Federal Government works through the Small Business Administration® to provide guaranteed loans for budding entrepreneurs.  You can also learn about federal grants, surety bonds, and venture capital on the Financial Assistance page.  Business owners can not only find fund ideas through the agency's website, but also locate district offices in their communities. 

Y Combinator®

Experienced entrepreneurs always point out the importance of seed funding when it comes to their businesses.  Seed funding is the first round of funding acquired by small businesses from investors.  This money is often issued in modest amounts to account for rent, product prototypes, and other expenses.  Every business owner should get familiar with seed funding firms like Y Combinator® before applying for loans and grants.  Y Combinator® http://ycombinator.com/ has been profiled in The Motley Fool®, The New York Times®, and other media outlets for its unique business model. 

This seed funder offers small amounts of investment funds in exchange for a minor stake in a new business.  Y Combinator® typically restricts its seed funds to less than $20,000 per business.  The seed fund application is far simpler than a grant application and requires less of your valuable time.  Y Combinator® invites a handful of finalists each funding round to its San Francisco headquarters for interviews.  In exchange for seed funds, you give a 1% to 2% stake in your company to Y Combinator®.  Seed fund recipients also stay in San Francisco for three months to receive advice from company partners, solicit investments, and learn more about small business operations.  In the early stages of a business, Y Combinator® can provide the lifeline for an innovative product or service. 

Sequoia Capital®

Another option for small business funding comes in the form of the venture capitalist.  Venture capital firms provide varying levels of financial investments to small businesses.  These investments are provided in exchange for small stakes in businesses as well as limited control over company affairs.  A leader in the world of venture funding is Sequoia Capital®.  This venture capital firm operates offices in India, China, Israel, and the United States where small businesses are on the forefront of innovation. 

Sequoia Capital® http://www.sequoiacap.com/ breaks down its venture funding efforts into myriad categories.  From the main page, you can select whether your business is in the very early stage, the early stage, or the growing stage.  You can also track down venture funding opportunities by industry including energy, information technology, and outsourcing.  Sequoia Capital® goes beyond seed funding amounts offered by Y Combinator® with investments between $100,000 and $1 million per business.  For small businesses in the growth stage, Sequoia Capital® can provide up to $100 million in venture funding in exchange for increased stakes in recipient companies. 

MicroLoan.com®

The latest trend in small business financing around the world is microlending.  This trend is so strong that economist Muhammad Yunus won the Nobel Peace Prize in 2006 for his Grameen Bank.  This microloan bank in Bangladesh helped entrepreneurs start their businesses with very small loans with flexible repayment options.  Microlending is not restricted to the developing world, however, as companies like MicroLoan.com® have popped up in the United States. 

MicroLoan.com® http://www.MicroLoan.com has been in business since 1991 offering loans below $25,000 to small businesses.  This microlender offers incentives like 60-month repayment schedules, fixed interest rates, and low closing costs to attract small businesses.  Businesses have flocked to MicroLoan.com® over the past two decades because of these benefits.  The website notes that the bank has helped more than 18,500 small businesses with $117 million in loans since its inception.