Small Business Funding Options and Resources

Small Business Training Resources

True entrepreneurs realize that nothing worth having comes easy in life, and unfortunately the challenge of becoming a successful small business owner is no exception. However, with focused attention and persistence, no obstacle to so tough it cannot be overcome.

The SBA Learning Center is a great place to begin your small business education as it provides an entire library of small business training and resource materials in each of the following four categories:

• Plan Your Business - covers 70 objectives in the areas of How to Write a Business Plan; Legal Requirements; Is Buying a Business Right for You; and Entrepreneurship. 
• Launch Your Business - includes training on 49 objectives in key categories such as Financing Your Business; Introduction to Pricing; and Understanding High-Tech Products.
• Manage Your Business - provides training on another 50 objectives related to mastering daily business activities like Employee Recruitment and Retention; How to Better Understand Your Customer; Sales Management, and key tips for Selling Your Business. 
• Market Your Business - another 52 objectives are part of marketing strategies, which include Market Research; Basics of Marketing; Developing a Competitive Advantage; and the growing importance of Social Media Marketing. 
• Grow Your Business - 12 additional small business funding objectives are covered, which include Finding and Attracting Investors; and Pricing Models for Successful Businesses. This course is perfect if you're ready to expand your business to new markets and locations.

Setting aside time each day to work through this comprehensive list of available resources, will help you develop the knowledge and skills you need to qualify for small business funding and greatly increase your chances for owning that successful business of your dreams.  

“Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor. It’s about stewardship and, therefore, about achieving the good society.”

- Robert J. Shiller

Small Business Funding Options

The Small Business Administration, or SBA, is a key partner to banks and other financial institutions when it comes to providing higher risk loans to small business owners. While you may not immediately qualify for a loan with the bank because they consider new startup businesses to be too high risk, banks will work in partnership with the SBA if you qualify through one of their many small business funding programs.

This partnership creates a win-win scenario because you get the money you need, and the Bank gets to book the loan at a greatly reduced risk because the SBA has "guaranteed' approximately 75 % or more of the loan proceeds. If you fail to pay, the bank is paid back by the SBA. Of course, that's not going to happen in your case, but it's important you know how the process works.

Several small business funding programs offered by the SBA include:

• 7(a) Loans - the most common type of SBA guaranteed loan. Often this is used when the purchase of the business includes real estate. However, 7(a) loans can also be used for working capital; to refinance existing business debt, or for the purchase of new business equipment. 
• 504 Loans - this option is used to finance major fixed assets that promote business growth and job creation in a community. Unlike 7(a) loans that are done in partnership with local banks, 504 loans are processed in partnership with local CDC's, or Certified Development Companies.
• Micro Loans -  this program supports small loan requests up to $50,000. The purpose of the program is to help small businesses and start up and expand. The funds provided by the SBA are designated to qualified intermediary lenders which are non-profit organizations with experience in lending. 
  

Doing your homework on how to successfully apply for any loan program is critical to your success. The act of researching the specific qualifications of each loan program will take you through a pre-qualification process. In essence, as you learn about each program, you are discovering what you need to be able to demonstrate in order to qualify for the loan.

When you first research a program and you find out you won't qualify, that doesn't mean you give up. You create a plan to overcome each hurdle one by one until you have confidence that you will qualify. This is a recommended process for every entrepreneur who is just beginning to research start up business funding options. Read more about each of the programs highlighted above and more at SBA Loans. 

Small Business Grants

It's understandable why business owners would seek out small business grant money because unlike a loan, the recipient doesn't have to pay back a grant. A grant is in effect, a gift. However, this kind of gift can come with clearly defined requirements of the grant recipient.

For example, recipients of a grant will typically have to utilize the money within a set time period, and are required to present a clear record for how the grant dollars were spent. The entity providing the grant wants that money spent in a way that fits within the stated purpose of the grant, and they expect the recipient to honor their commitment to abide by the rules stated in the grant agreement.

Grant applicants should also be aware that completing a grant request can be quite tedious work and very time consuming, with no guarantee that the applicant will receive any funds whatsoever. Proper completion of a grant application is critical as incomplete applications may be immediately disqualified. So, if you've never completed a grant application before, it may be wise to hire a professional grant writer to aid you in the application process.

If you do not have the resources to hire a grant writer, which may require paying that individual $20-50/hour you have another great option. Consider taking a grant writing course. If no classes are available in your local area, you can find a course quickly online at a reasonable price.

Where to Find Sources of Grant Money

Sources of grant money come from a wide variety of sources and each source tends to be focused on a specific purpose for the money they grant. Therefore, it is imperative that you focus your search on entities that closely align with the purpose of your business in order to maximize your chance for being chosen as a grant recipient.

Source of Grant Money Include:

• Wealthy Individuals/Foundations
• Local, State and Federal Government
• Non-Profit Organizations
• Company's / Corporations
• Professional and Community Organizations

Regardless of the source, entities offering small business grant money tend to have a mission on helping a certain group in society. For example, if you happen to be a woman or a minority, grants may be a viable option.

Additionally, if your business provides socially responsible benefits to the community, or helps to protect the environment, grant money may be available. To begin your search, check out GrantWatch.com

Types of Small Business Grant Money

In some cases a startup project may qualify for a grant. Particularly if the purpose of the business is to provide much needed resources or services to a community in need. For example, when disaster strikes, FEMA offers grant assistance to help support local communities and businesses.

The Small Business Administration (SBA) offers a program called Boots to Business (B2B), which awards grants to support and educate former military personnel on how to become successful entrepreneurs.

In addition, the SBA offers grant programs for the purpose of research and development, and for business interested in export development. Conduct your own research on what the SBA provides by checking out Small Business Administration on Grants and More!

While it may not be a popular thing to hear, the fact remains that small business grant money is NOT readily accessible for most small businesses – but if you fit within a certain minority group or the purpose of your business provides social or economic benefits to the community, your chances are greatly increased.

Some states do offer small business grant money in low to moderate economic zones under very specific conditions. Go to your state’s website to further explore this option.

Most businesses will need to seek funding though means other than a grant. If you're unsure where to start, consider finding a mentor or taking a workshop through SCORE.org. This is a great resource that can provide a lot of valuable tools and resources for new business owners.