What To Do Before Seeking Funding For Small Business Startups

You have a great business idea, you’re passionate about it and ready to get started. The only thing standing in your way is a lack of capital. One of the most frustrating things about starting a business is getting funding for your small business startups. This can be especially stressful if you don’t have the proper guidance or understanding of how to do it. The good news is, even though you may feel alone in your start-up journey, you certainly aren’t.

As a matter of fact, according to NPR, 5.4 million new business applications were filed in 2021. People are taking the leap into entrepreneurship in record numbers. Let’s take some of the stress out of starting a business by providing you with the startup funding guide you need. 

This blog post may contain affiliate links which means we get commissions for purchases made through links in this post at no extra cost to you.

What To do BEFORE You Apply for Funding 

Before you start looking for investors, loans, or grant opportunities, you have to know how much money you need first. 

Work Out Your Needs

Before you seek funding for your small business startup, take some time to figure out what your financial needs are in your business. This will help you decide the types of funding you’ll need to achieve your business goals. Business owners need funding for many reasons, such as sustaining operations, scaling, and of course to start up. Think about the specific expenses you need funding for.

If you need help calculating your startup expenses, download our Business Startup Budget Calculator. You can use our Business Startup Calculator to not only calculate the startup cost, but monthly expenses. You’ll be able to change expense categories or add new ones to fit your business. This calculator is a 3-page fillable pdf that allows you to plug in your financial data and track and monitor along the way. A must-have for any new business.

Speak to Experts

You don’t have to go through the start-up process alone and we recommend you don’t. You should seek out experts to speak to, before, during, and after a start-up. We recommend:

• Chief Financial Officer (CFO)
• Accountants
• Bookkeeper 
• Tax professionals 

Experts can really help you on your journey and maximize the funds that you get for your business.

Keep Your Options Open

Sometimes, you won’t get all the money you need from one source. There are many ways you can fund your business such as:

• Loans
• Grants
• Investors

You can also enlist the help of family, friends or cover the difference with your own pockets. 

Make sure to explore all of the offers available to you. In addition to that, funding options often come with terms and conditions. Make sure the terms and conditions are favorable to you. 

For example, you can look at:

• Repayment schedule
• Interest rate
• Penalties and other fees associated
• What the money can and cannot be used for 

Make Sure Your Business is Active

Outside of borrowing from family and friends, you’ll need to prove that you have an active business to funders. Organizations and lenders don’t want to give money to inactive businesses. 

Having an Employer Identification Number (EIN) is not enough. You have to show these funders and these lenders that you are actually serious about your business. Show that you’re active in your business and you are actually trying to make sales. In addition to that, demonstrate that you have a plan and a concept that you’re working on.

We highly recommend having a functional website to improve your legitimacy. In addition to that, make sure you have a checking account for your business in your business name. 

Where You Can Get Funding for Small Business Startups

Now that you’re ready to seek funding for your small business startup, there are many places you can check out. We did some of the research for you to save you some time. The businesses we list below are there for you even when traditional lenders reject you. 

Kiva

Kiva is a nonprofit organization crowdfunding platform that lends money to business owners. They have different partners, including businesses like She Boss Talk. Their lenders may choose to lend to various communities of people such as women and single parents.

Kiva believes in character, over credit, and the power of community-based lending. Their mission includes providing funding opportunities for entrepreneurs where conventional lenders will not.

With Kiva, you can qualify for a loan between $1,000-$10,000, with no interest! They offer to several different industries. Kiva singled out farmers, artisans, students, shopkeepers, builders, and restaurant owners to show they provide funding to various different entrepreneurs. 

In order to access a Kiva loan, consider the following criteria:

• You and your business must be based in the United States.
• You must at least 18 years old.
• The loan must be for business purposes. No personal loans are allowed.
• Your business must not be engaged in any of the following activities: multi of marketing, direct sales, any illegal activity, gambling, any type of scams, financial investing, or stocks.

Check out their website to get started.

Bank Breezy

Bank Breezy is another great lender that provides funding for small business startups. Bank Breezy, gives same-day financing of up to $25,000. Not only are all industries welcome, but they don’t require collateral. Everything is done online. The company will view and accept the offer, link your banking, review the approval term, sign the agreement and receive your funds. 

In addition to that, you’ll get a discount on the amount you have to pay back if you pay it back early. This is important because paying a loan back early may result in a penalty for some institutions. Other institutions may not penalize you but they won’t reward you either. 

If you’re interested in getting a loan from Bank Breezy, make sure you meet these criteria:

• 450 credit score 
• At least $5000 in monthly sales 
• Be in business for at least 6 months 
• Have a business bank account in the business name
•  EIN (Business Tax ID)

Next Steps

Starting a business can be overwhelming. However, countless entrepreneurs have done it and you can do it too. Make sure you prepare your business before seeking funding for small business startups, to expedite the process. Otherwise, you could experience not only denial but significant delays in receiving the much-needed capital.

Share this blog post with aspiring entrepreneurs in your network so they can get their business ready too!