On June 30th, Entrepreneurs and Small Business Owners scurried to meet the deadline for the PPP Loan and submit the EIDL application. The calls poured in tying up the phone lines resulting in long wait times. The SBA got a taste of what the IRS went through with the stimulus.
The good news is that the PPP Loan application was extended to August 8, 2020 and the EIDL applications were extended to September 30, 2020. The SBA loan programs are disaster provisions that have attractive interest rates or, as with the PPP loan, a portion of the amount borrowed is forgiven if the usage meets the criteria. But a business is not limited to them as a funding source. Let's look at other options that exist outside of disaster funds.
1. Crowd Funding - Crowdfunding began as a way for the public to donate small amounts of money, often through social networking websites, to help artists, musicians, filmmakers and other creative people finance their projects. Through the JOBS Act, this concept was also promoted as a way to assist small businesses and startups looking for investment capital. You can go to websites such as Kickstarter, or you can go through your state who may also offer a crowd funding option like North Carolina.
2. Angel Investors - Anangel investoris a person who invests in a new or small business venture, providing capital for start-up or expansion. Angel investorsare typically individuals who have spare cash available and are looking for a higher rate of return than would be given by more traditional investments. But you need to have your numbers together. Investors want the security of being able to get paid back.
3. Bootstrap your business -meaning you invest your own funds into your business. Perhaps you think funding the business yourself carries lots of risk—and it does. But it’s important to know what it means to put some skin in the game. In the business world, you will be less likely to be taken seriously if you don't want to invest in your own business. Business Investors and Business grantors will often ask how much money you put in when considering giving out funds.
You could get a 0% / low interest APR business credit card, offering you the chance to borrow cash for a period of time without incurring interest, take out or borrow from your 401k, use savings, apply for the regular SBA loans or loans from your bank, etc. When you are all in, you are less likely to be complacent, ruled by fear, and force yourself to act outside of your comfort zones.
4. Get a Business Partner- Nothing like having someone share the business responsibility and business costs to speed things along. It is also great to have someone who is strong in your weak areas and vice versa. There are quite a few businesses that gain their success via strong partnerships. It is important to have a partnership agreement in place, and to make sure all parties involved have the same business goals.
5. Business Equity - Your business has a value. it is important for you to know what business valuation is, and what it means to offer up pieces of your business equity for business capital. You may want to seriously consider getting a professional assessment of your business before doing an Equity Deal.
6. Grants - You can find Business Grants searching Non- Profits organizations, State and Municipalities, Grants.gov, SBA Grants, or sometimes churches.
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