The good news is that entrepreneurs have more options for funding than in the past. According to Entrepreneur.com, access to capital is improving for small businesses. This may be a frightening time to begin an entrepreneurial venture. However, there are an increasing number of available financing options. The following list contains some of the most prevalent in the current market.
- Banks – The number of people going to banks for loans is increasing. “According to a report this week on banks with more than $10 billion in assets, the overall volume of loan applications increased by 5.6 percent in September over August, reports Biz2Credit, an online credit marketplace in New York City that connects small and midsize businesses with lenders.”
- SBA Loans – Entrepreneurs have also traditionally gone with loans from the Small Business Association. “In 2011… it backed $30.5 billion in 61,689 loans to small business.”
- Angel Investors – “Angels invested $9.2 billion in 27,280 startups in the first two quarters of 2012, a 3.1 percent increase in dollars and a 3.7 percent increase in number of entrepreneurial ventures over the same time in 2011, according to a report this week from the Center for Venture Research at the University of New Hampshire.”
- Venture Capitalists – “In 2012, venture capital firms have raised $16.2 billion, representing a 31 percent increase from the $12.4 billion raised in the first nine months of 2011, according to a report from Thomson Reuters and the National Venture Capital Association released this week.”
- Crowdfunding – There have been some unusual ways that entrepreneurs have managed to raise funds. Crowdfunding has been growing in popularity. Entrepreneurs can raise funds through networking on the internet. Supports fund other people’s ideas or interests.
- Microlending – One of the top microlending sites is Kiva.org. Kiva is “a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.”
- Pledging – Kickstarter is a unique site allows entrepreneurs to keep ownership and control over their work while tens of thousands of people pledge millions of dollars to help finance their creative ideas. The idea must reach its funding goal or no money changes hands. Entrepreneurs that receive their anticipated funds, can test concepts without risk.