Looking for small business financing usually refers to small business owners searching for sources of funding. Commercial banks, credit unions, the Small Business Administration (SBA), and independent financial companies are the most common providers for these business funding. However, there are other means of finding capital for start-up and operating expenses.
Before looking for small business financing, it’s important to have a well-written business plan that outlines the purpose and goals of the business. Several companies and websites allow owners to access step-by-step guides for writing an effective plan.
When looking for this type financing, many business owners look to private investors. These individuals contribute significant amounts of money in exchange for a portion of a business’s profits. Some investors may also want to have input on financial decisions made for the business. Most private investors provide equity, not debt, meaning that the contributed funds do not have to be repaid. However, it’s best to make sure a business owner understand the terms set out by an investor, in case he or she is only willing to provide debt.
Another option when looking for small business financing is to form a partnership. A partnership means two or more people become the owners of a business. While it does mean that profits will have to be split evenly, a partnership also distributes debt and liabilities to all owners, compared to a sole proprietorship where one person is responsible for the business.
Small business solutions refer to the variety of services and products a business can use to improve its management and productivity. These solutions can help solve accounting, production, and personnel issues, usually at a cost. The more extensive and complex a solution, the more costly it can be. However, the price paid for a product or service to improve a business can pay for itself in the long run.
One of the most common types of small business solutions is accounting applications, or software. Many software and computer companies manufacture effective accounting applications that enable a business to easily input, edit, and manage financial information. Business can purchase software to track customer accounts, bills, and payroll. Accounting software can be purchased to track single accounts, such as debt, or to track all of a business’s financial activity.
Other small business solutions include agencies organized to assist these businesses in every aspect. Typical services include up-to-date business news, loan and debt counseling and information on taxes and business laws. They may also offer advice how to manage employees, increase profitability, reach a larger customer database, and secure real estate. Their glossaries and frequently asked questions sections can help small business owners find answers to the most common problems. Many states and large cities have these organizations, so business owners should find out if one is available in their area.