A wide range of options exist when looking for funding for your business. Check out the different options to consider:
Maximizing human capital first and using existing and/or self-generated funds second, to take an idea or company from one point to the other without referring to investors or banks. Learn about bootstrapping your business by accessing our funding guide.
Friends & Family Funding
We know what you might be thinking — how can I ask for money from friends and family to start my business without making it awkward? Luckily for you, we have a few tips you can use to make it less awkward, less stressful, and have a better chance at maintaining the relationship if you aren’t able to pay the money back.
Venture Capital & Equity Funds
The terms ‘Venture Capital’ and ‘Angel Investor’ are often confused. Both receive equity (basically shares in a company that is not publicly traded), from providing investments into private companies, but there are several differences.
Loans and Financing
Getting a loan is just one of the many ways you can fund your business. Luckily, there are many different options at your disposal.
Crowdfunding combines the concepts of crowdsourcing and microfinancing, bringing together various individuals who commit small amounts of money to projects and entities they want to support. This is often done through websites that make it easy for entities to find potential funders. Funders could expect something in return for their contributions—such as equity, products, or services—or they may donate the funds. There are four types of crowdfunding.
Frequently Asked Questions
Do you have questions about setting up your online store? You should consider checking out our Resource Navigator. It houses the contact information of 400 of our most helpful partners from across the state who provide free to low-cost assistance to Iowa entrepreneurs and small business owners.
Q: How do I know how much funding I need?
A: A lot of the details for funding needed can be found when creating a business plan. A good place to start is to do some general research about the industry you are in, how much the products you want to sell cost throughout the supply chain, and how much it may take to advertise and acquire new customers (or maintain current ones if already in business).
Q: What are SBA loans?
A: SBA loans, or Small Business Administration backed loans, are guarantees from the SBA (government entity) to banks that they will foot the bill to the bank if you are unable to repay the loan you take out. Their various programs have helped thousands start and grow their businesses, and in recent times with Covid, keep them afloat during an economic downturn.
Q: Do I need to invest money to start my business?
A: This depends entirely on your type of business. If you already have computer and graphic design skills, you could technically sign up as a freelancer on various platforms for free, and begin offering design services to customers with absolutely no advertising. The only real cost is the time spent on the projects themselves. Other types of businesses, such as a manufacturer, will have quite a few initial investments needed to set everything up and to acquire new customers.
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