Funding Your Small and Medium Business (SMB)

Small and Medium Business (SMB) needs small funds, but sometimes it is not even possible to start a small business. Let's say you want to start a dropshipping business, you need just about $1000 (for website development and marketing). If you don't even have $1000, you can't start your business. However, there are methods to raise funds for your small business You can raise money by borrowing from friends and family, using your funds, or even crowdfunding. If you are trying to build capital or sell your services or products, you will have to pitch your idea to get interest from the lender or investors, you will also have to pitch your idea through marketing campaigns if you are trying to sell products and services. Whether you can get investors from your pitch or buyers from your pitch depends on your idea (that you have pitched) or the product you are trying to sell

Different Methods to Fund Your Small and Medium Business

Crowdfunding: There are a lot of platforms where you can lunch crowdfunding for your businesses. Crowdfunding means you ask people to support your businesses through an online or offline platform. People who care about your business or who find your business interesting will donate or invest in your business. Some crowdfunding are purely a help, you don't have to pay back, whereas some crowdfunding campaign requires you to give the funders something. For example, on gofundme you do not have to pay back, whereas on Kickstarter you are required to give something to the funders. Crowdfunding does not mean only the people from your own country will donate to your cause, people from other countries might also donate to your campaign. If you think crowdfunding is not for you, you can try peer-to-peer lending sites.

Peer-to-peer lending: Peer-to-peer lending is a platform where you can get a loan from other individuals. You will have to pay back the loan along with interest. The lending club is one of the best platforms for peer-to-peer loans.

Angel investors: Angel investors are the people who take interest in investing in the business and help small businesses and start-ups get back into the business. You can find these angel investors when you attend business workshops and business seminars. 

Banks: If nothing works, banks can come to rescue your business. Get a bank loan for your business.

Funding Your Small and Medium Business With a Bank Loan

In order to fund your business through a bank loan, you will have to fulfill a lot of criteria. However, once you have fulfilled the criteria, you will be eligible for the loan, and it can be very rewarding for your business because banks have low-interest charges compared to private lending, you also get a flexible loan repayment, which is almost absent when you get a loan from private lenders. In order to become eligible for a bank loan, your business needs to be a registered entity, your business should be registered with local authorities, and you need a physical location for the business (you need a contact office even when your business is completely an online business). Your business also needs to be operational, you can not get a loan for a business that you have not started yet. You also need collateral to secure a bank loan, if you don't have collateral, you might not get a bank loan because collateral tries to minimize the risk for the banks in case you cannot pay the loan. You also need to prove your income source, either your personal income or a business income. If you already have a loan from other banks, you might not be able to get a loan again.

How to Attract Investors to Your Startup

Do you want to invest in something that does not look profitable? I bet you know the answer. No one wants to invest in a business that does not guarantee success, therefore, in order to attract investors for your business you need to prove that your business can be profitable in the future. What determines the success of a business? There are a lot of factors involved, for example, your team, business strategies, marketing budget, product or services, market size, bad debt, outstanding loan, current revenue, paid-up capital, etc. In order to attract investors to your business, your business also needs to be a legal entity, your business has to be registered with the local administration, and your business needs to maintain the accounts (a balance sheet, audit report, etc.) your business also need tax clearance report. When people invest in your business, they are not actually gambling and depending on sheer luck to profit, they are actually investing in a business that will give them a return on their investment, therefore, your business needs to be fully functional before you can invite people to invest in it. You need to have a cash flow, you need a presence in the market, etc.