When financing your small business or startup, marketing is as important a consideration as any. Here are five sources of financing you may not have thought of.
Financing your small business or startup can be an extremely intimidating prospect. There are so many expenses associated with starting a business – buying or leasing equipment and business space, hiring employees, stocking your inventory and supplies – and then there's marketing to consider.
It doesn't help that traditional small business bank loans are getting harder and harder to come by. If you have bad credit, or lack a business history to show to bank loan managers, you'll need to look for alternative sources of funding. Even if you secure a more traditional loan, some of these alternative funding sources can help you generate the cash flow you need to pay for marketing costs.
1. SBA loans
The Small Business Administration helps small business owners finance startup and other business costs through three loan programs: the CDC/504 Loan Program, the 7(a) Loan Program and the Microloan Program. While the SBA itself doesn't finance loans through these programs, it guarantees portions of the small business loans awarded to help small business owners and aspiring entrepreneurs secure access to more funds.
If you're looking for a way to cover PR and marketing costs, you may want to look into the Microloan Program. This program provides small loans of up to $50,000 to help entrepreneurs cover costs and even generate some working capital. Marketing and PR costs for a small business or startup may not be as high as other costs such as rent, equipment, supplies and salaries, so a microloan could be perfect for meeting these needs, especially if you have a comprehensive marketing plan in place.
2. Online lenders
In recent years, numerous online lenders have emerged to answer the question "What are my options for small business financing?" Online lenders are another way to get your hands on the money you need to cover marketing costs. These lenders give loan amounts ranging from a few thousand to a few million dollars, so you need to shop around to find the right online lender for your business needs. However, many of these lenders want to see at least a couple years of business history, so this may not be the best option to finance marketing for your startup.
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3. Business credit cards
A business credit card might be the cash flow solution to help you meet recurring marketing and PR costs for your small business. It could also help you cover the cost of startup marketing to get the word out about your new business.
A business credit card works just like a consumer credit card. You'll get a credit limit, and you can use the credit as you need it. This is a good option if you're not sure how much money you'll need and don't want to borrow more than necessary. Plus, business credit cards come with rewards like cash back or travel miles.
4. Personal loans
Usually, people take out personal loans to finance personal expenses, such as the purchase of a car, home repairs or improvements, or the costs of a wedding. But that doesn't mean you can't take out a personal loan to help finance your small business marketing costs. If you've got good credit, a personal loan could be easier to get than a small business loan, especially if you want to finance marketing costs for a startup and therefore don't have a solid business history to show to lenders.
5. Funding from investors
Investors are the holy grail of startup financing. Not only can money from investors cover your startup's marketing costs, it can cover your other initial costs, like equipment and supplies, and even help you attract your first clients. However, not every small business will attract investors. Investors and venture capital firms are looking for businesses with high revenue and strong growth potential. They want to maximize the return on their investments by getting in on the ground floor of the next Facebook, so you want an extremely scalable business model to attract funds of this type.
If you're looking into your options for financing small business marketing, don't discount less traditional financing options. These sources can all help you generate the funding to get the word out about your new business or simply manage your existing small business's reputation. Keep the cash flowing with some lesser-known funding options, and you'll reap the rewards in the form of increased revenue and profit.