In business, you need money to make money. Whether your goal is to start a new business or to expand a currently existing one, seed money is undoubtedly the lifeblood of business. Regardless of whether your intended uses for capital is for starting or for expanding your business, know that there are many sources available to you.
The nearest is not only the easiest but can also be the dearest. If you have family and friends who are willing to shave off their wallets for you, then you’re in luck. Many of your family members and friends may be interested to invest some start-up or expansion capital for your business. Try them out first. Just make sure that you repay them on time.
However, if you need a huge amount for your seed or expansion capital, you may need other sources. Not everyone is lucky to have a rich brother or aunt with millions of dollars sitting idly and coldly inside the bank. If you’re one of the not-so-lucky ones, your next possible source of capital will be loans from financial institutions. Generally, you will need to apply for a loan. The application process usually requires you to submit a business proposal or plan. The lending company will be evaluating your proposal and assess whether it is feasible and worthwhile. If your loan application does get approval, make sure you repay your loan regularly, and never skip a payment date. Regular payment increases your trustworthiness in the eyes of the credit institution that granted your loan. The increased trust will come in handy in the future, as you might want to apply for a new and bigger loan someday.
Another good option is the 7(a) Loan Program of the United States Small Business Administration (SBA), particularly its Express Programs, which come in three types: SBAExpress, Community Express, and Patriot Express. The common denominator of these three types of Express Programs is a leaner and quicker process for particular types of borrowers. SBAExpress is for borrowers who operate small businesses. Community Express is for borrowers located in underserved communities such as those in Historically Underutilized Business Zones and distressed communities as defined by the Community Reinvestment Act. The Patriot Express is for small businesses operated or owned by at least 51% veterans or military members. Depending on which type of Express Program you are eligible for, you can get up to half a million dollars of capital. You can also expect a response from SBA within 36 hours after submitting your complete application.
Each type of loan under SBA’s Express Programs has certain eligibility requirements. The list of eligibility requirements, as well as more helpful information and downloadable forms and documents, is available from the SBA’s official website at sba.gov.
Investments from family and friends, loans from financial institutions, and SBA’s Express Programs are just some of the various sources of funding that you can explore so that you can start or expand your small business. There are other sources, as well. The most important thing for you to remember is to select the right one for you.