By Matt Lurie, Ruby.
As a small business owner, navigating your finances can be an overwhelming task. Knowing where to look when you need a little extra funding is not always a straightforward process. From SBA loans to grants and venture capital, numerous resources are available to small businesses no matter where you are on your journey. Ruby compiled the most popular sources to get you started and help you find the support you need to be successful.
The SBA 7(a) loan is the Small Business Administration’s most popular product, according to NerdWallet. It offers a “flexible sum of cash for a variety of uses, including managing daily operations, purchasing new products and refinancing high-interest loans.”
The SBA establishes the general loan process guidelines. It backs the loans which are given out by third-party lenders who must follow SBA rules. This allows lenders to offer loans with “less stringent credit standards and lower down payments than conventional loans,” says Bank of America.
There are several types of SBA 7(a) loans, but the most common are the:
Standard 7(a) – Maximum loan amount of $5 million. Credit decisions made by the SBA
7(a) Small loan – Maximum loan amount of $350,000. Credit decisions made by the SBA
SBA Express – Maximum loan amount of $500,000. Faster review process; credit decisions made by the lender
SBA.gov lists the current interest rates for variable and fixed-rate loans.
Grants are a popular funding option because they don’t have to be paid back! As Investopedia explains, “A small-business grant is an award, usually financial, given by one entity (typically a company, foundation or government) to a company to facilitate a goal or incentivize performance.”
Grants do, however, come with strings. Obtaining a grant typically involves going through a three-stage process — a (sometimes time-consuming) pre-award phase; the award issuance; and a post-award phase (which may feature stringent follow-up requirements, such as reports or audits, to ensure compliance with terms).
Grant types include the following:
Included within the above types of grants, one can find a wide range of grants designed to assist specific small business owner groups, such as women, people of color, military veterans and persons with disabilities. Below are just a handful of the opportunities available.
Interested in gaining funding via a venture capital (VC) organization, or just want to learn more about how VC works?
There are resources out there for every small business!
Funding a small business doesn’t have to be a hassle. In fact, with the right resources, it’s a relatively straightforward process. The trick is deciding which options you want to pursue based on your business goals.
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Original article source: Ruby
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