There are more ways than ever to raise capital for your business venture. You could secure a traditional loan or crowdsource capital. It is important to find the right funding fit for your business. You may piece together financing from different sources depending on your needs.

1. Determine your financial needs. Here is a helpful guide from the SBA to help you calculate your costs:

https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs

2. Research what funding options might be right for your business.

3. Gather your information. If you don’t have a written business plan, now would be a great time to do that. Your business plan will serve as a blueprint for your business. It will include your financial needs, market research, and development projections. The Big Bad Business Series will host a Workshop, How to Write a Business Plan, in conjunction with the University of Mississippi Small Business Development Center in April. See more of our upcoming events and workshops here:

https://www.oxfordarts.com/incubator-events

4. Secure funding. Your funding source will depend on your business model, your financial needs, and how you can sell yourself and your business plan. Finding the right fit for funding will increase your chances of securing capital.

Banks & Credit Unions.

These lenders provide term loan options or a line of credit. With a traditional business loan, good personal credit and collateral are required. The loan application process may take some time. If you need funds quickly, this might not work for you. This option is great for established businesses that have a good credit profile and a strong business history. If you have a well-established relationship with a bank, I recommend speaking with them to see what they have to offer your business.

Before you apply for a loan, it is a good idea to familiarize yourself with your credit profile and your business’s credit history. Research loan and lender options to see what will work for your situation. Compare interest rates, loan restrictions, and terms. For instance, is there a penalty to pay your loan off early? How will this process affect your credit score? What collateral is needed to secure funding? It is important to select a lender that fits your financial needs.

Investors can be a great way to secure funding for your business. How do you find investors? Network, network, network. Use opportunities such as workshops, conferences, and business events to meet people. To attract investors, prove you’ve done your homework. This includes a well-written business plan, industry knowledge, and excellent market research. Show how your business stands out from the competition. When it comes to finances, make realistic projections for growth. Take your business seriously and investors will too.

Crowdfunding platforms such as Kickstarter and Indiegogo allow you to seek small funding from multiple investments instead of a single source. These investors are not typical investors as they do not share ownership or expect a financial return on their investment. Some businesses offer incentives for investing or gifts for investing, making this a fantastic financing source for a creative or product-producing business.

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