5 Viable Options for Financing Your Small Business

StrategyDriven Managing Your Finances Article |Financing Your Small Business|5 Viable Options for Financing Your Small BusinessFinancing a small business isn’t always easy, but there are plenty of solutions available, no matter how bad your credit rating is. Before you start looking for finance, however, make sure you have a strong business plan. Lenders will want to see evidence that your busines is viable, even if you don’t need a lot of cash to get the ball rolling. In addition, be prepared to put up some collateral, either your personal assets or shares in the business. Often, loans come with strings attached, not just interest!

In this article, we will look at the best solutions on the table.

Credit Card

When you don’t need a huge amount of capital, easily accessible funding options like credit cards are a useful tool. The great thing about credit cards is that they are flexible, so if you only need a short-term cash injection to buy supplies, a credit card may work for you.

It’s even possible to enjoy a 0% loan if you look around for a good deal. Plenty of credit card companies have 0% introductory offers for new customers but bear in mind your personal credit rating will dictate which offers are available to you.

Bank Loan

Approaching your bank manager for a business loan is another option, but this one takes longer to sort out. Banks don’t typically throw money at customers these days; they were too badly burned in the financial crash of 2009. You’ll have to provide a solid business plan, as well as detailed cash projections outlining how you plan on repaying the money. If everything looks good on paper, you should have no problem qualifying for a business loan.

Specialist Lender

While high street lenders have their place in the finance sector, they don’t tend to work for people with bad credit or niche requirements. For example, if you have CCJs in your credit report or you want to start an online business selling CBD products, mainstream lenders won’t touch you. You’ll need a specialist instead.

Luckily, specialist business models and bad credit doesn’t have to hold your business back. There are lenders who will consider most applications, no matter how off-the-wall, so don’t assume your business idea is doomed if you have a few late payments on your report.


Crowdfunding has allowed all manner of businesses to achieve their potential. Thanks to sites like Kickstarter and Indiegogo, startups like Pebble and Oculus have achieved phenomenal success. As long as you have a great pitch and people can see the potential in your business plan, the money will flow your way. In fact, crowdfunding has been so successful in recent years that many small startups have bypassed traditional funding sources altogether.

Make sure you understand the different types of crowdfunding before you create a pitch. They include:

  • Donation-based crowdfunding – ask for money with nothing given in return
  • Reward-based crowdfunding – ask for donations in return for a reward
  • Peer-to-peer crowdfunding – cut out the middleman and borrow money directly from investors
  • Securities-based crowdfunding – investors are given a share in the business in return for cash

Angel Investors

Angel investors are people with a lot of experience and significant capital to spare. They look for embryonic businesses that show a lot of promise. In return for capital, the investor is given a share of the business or the promise of a decent return on their investment.
One advantage of securing funding from an Angel Investor is that you can tap into their experience in the early days of running your business. After all, they have a vested interest in ensuring your venture is a success!

Lastly, don’t dismiss the notion of asking friends and families to contribute to capital if they can afford it. If they say no, consider whether your business idea is worth pursuing.

The New Economic Revolution

There’s a revolution in full swing that is changing the way ordinary Americans make a living. From internet commerce technology has sprung forth the Bottom-Up Economic Revolution. It’s dramatically altered the way business is conducted by both the seller and consumer. Front and center in this shift is platform businesses – small business cloud-based companies, online marketplaces and crowdfunding sites. They bring buyers and sellers, as well as non-profits and donors together in new ways to interact and do business.

Now the average Joe and Jane can create income, and in many cases a livelihood, with relative ease compared to the offline brick and mortar approach to business. Thanks to websites designed to bring sellers and buyers together in new ways, the possibilities are virtually endless. You can find homeowners in need of your maintenance services sell your own custom made clothing, rent a room on Airbnb, to name just a few opportunities. Need capital? Funding opportunities are also available and could be just a few clicks away at crowdfunding sites for the everyday entrepreneur.

This new group of self-employed individuals who are making part or all of their income online are fueling the Bottom-Up Economic Revolution like never before. As traditional employment opportunities continue to be in flux, these proprietors are increasing at a fast pace. The numbers tell it like it is:

Hi there! This article is available for free. Login or register as a StrategyDriven Personal Business Advisor Self-Guided Client by:

Subscribing to the Self Guided Program - It's Free!


About the Author

Bill Clerico is CEO and co-founder of WePay, where he drives the company’s vision, strategy and growth. His goal is to make payments easy for the world’s small businesses and the platforms that serve them. Before founding WePay, Bill worked in technology investment banking at Jefferies & Company, where he advised enterprise software, digital media and financial technology companies on M&A and capital market transactions. In 2010, he was named one of Business Insider‘s Silicon Valley 100 and in 2011, as one of BusinessWeek’s 30 under 30 Best Tech Entrepreneurs.