A Quick Guide to Your Business Funding Options in 2023

As an entrepreneur, you've come up with an airtight business plan and innovative products or services. Now, it's time to face the number one hurdle for any new business: securing adequate funding. 

Maybe you thought your personal savings would be enough to keep your business afloat until you started turning a profit. That was before you rented a physical location, started testing new products, and hired staff; the upfront costs go on and on.

The good news is that there probably are some business funding options that you haven't explored yet. We're here to talk about what those options are.

Read on to learn more about the different types of funding to consider and when to use them.

Traditional Bank Financing

The bank is probably top of mind when you're trying to secure business funding. Traditional banks do offer business financing options, including collateral-based and collateral-free options, lines of credit, and business credit cards. The only problem is that securing traditional bank financing these days isn't as easy as it used to be.

Already, traditional bank financing is limited to entrepreneurs with great credit and, in some cases, a business that's already showing signs of success. However, the sharp decline in Silicone Valley start-up success rates left banks hesitant to hand out funding to businesses. It's going to take a really compelling business plan with a demonstrable financial promise to secure traditional bank financing these days.

Online Funding

While banks are closing their doors on small business owners, online companies are filling the gap. Tiger Capital Funding is one of them because we understand how vital working capital is to the success of your business. 

An important thing to note about online funding is that most companies provide funding for specific purposes. For example, some companies may focus solely on equipment funding. Others may provide funding for niche purposes, such as green energy initiatives.

At Tiger Capital Funding, we provide working capital for a wide range of industries. We don't impose as many limits on what you do with your working capital as some groups. 

However, there are still some requirements you'll need to meet to secure our business financing. The best way to find out if your business qualifies is to talk to our Funding Specialists. If you qualify, you can receive working capital from us within hours.

SBA Funding

To support our economy and innovative capitalism, the federal government can offer some aid with financing. However, they don't finance businesses directly. 

The Small Business Administration can offer a guarantee on other kinds of financing. In other words, they reduce the risk for other entities. By securing SBA funding, you may also get access to increased funding or better rates.

That said, SBA funding isn't easy to come by, either. For example, you'll need to establish that:

• your business has existed for at least two years
• you have a credit score of 690 or higher
• you have a high annual revenue

Plus, there is a lot of paperwork to navigate when applying for SBA funding. This isn't the right option for a brand new business or a business that needs funding ASAP.

Small Business Grants

Small business grants are some of the most coveted business financing options because you don't have to pay them back. Like all grants, they're awarded by non-profits, government agencies, and other organizations. Grants usually have some of the most specific requirements to apply.

Some of the organizations that offer small business grants include:

• the SBA
• the Minority Business Development Agency
• USDA Rural Business Development
• Small Business Innovation Research

In addition to large grants from national non-profits and government agencies, you can also search for grants in your city or region of the country. Keep in mind that small business grants are one of the most desirable options for business owners, which means that the selection process is highly competitive. While it's always a good idea to apply for grants on a rolling basis, you will probably need to supplement your financing with other options. 

Equity Financing

Equity financing is, in its most basic form, the process of securing investors. However, there are many different subcategories under the umbrella of equity financing.

One popular option is to secure venture capitalists. Venture capital typically comes from an investment firm rather than an individual person. These firms work to develop a diverse portfolio that keeps them in business.

Another option is to secure an angel investor. An angel investor is a wealthy individual that invests their personal assets in businesses of all sizes. 

The downside of equity financing is that you're trading a portion of the company for funding. This means that your investment will receive long-term benefits from your company and, in some cases, have a say in all of your major business decisions. Equity financing is a good option if you're looking to expand your business and don't mind sharing ownership.

Crowdfunding

In recent years, crowdfunding has become a popular form of startup financing. Crowdfunding is the process of raising money from people at large, from friends and family to community members and people who are interested in seeing your business grow.

Crowdfunding is never a secure or consistent form of financing your business. While it can help to break ground, it's not something that you should rely on long-term. Not all crowdfunding efforts take off, and those that do peter out over time.

Take Advantage of Your Business Funding Options

While many entrepreneurs hope that they can fund their business ideas independently, few can. Use this guide to determine which business funding options work best for your current trajectory and your goals.

Are you ready to apply for working capital today? Tiger Capital Funding is here to help. Apply for funding now to find out if you qualify.