Small Business Funding: A Checklist

Small business funding helps small businesses obtain the capital necessary to acquire equipment, property and the manpower necessary to get the business started or become competitive. The funding is available from both public and private sources and is packaged in the form of grants and loans. Depending on the qualifications of the business owner, and the type of business the company is engaged in, there can be a countless number of funding opportunities available.

Sources of Funding

  • It is essential for a business to identify the sources of funding that may be available and become familiar with the eligibility requirements for the programs. There are a few funding sources that should be researched.
  • Consider researching sources available to provide loans or grants. Also, investor groups can help a business get off the ground. The funding institutions may provide funding to a particular type of small business, such as manufacturing, health care or technology.
  • Also, consider both federal and state governmental agencies. Many times there are numerous agencies within the government, so be sure to complete your research.
  • Additionally, private business, non-profit organizations and business development associations are funding sources that can help a business grow.
  • Use a business development specialist at a bank, lending institution or a local U.S. Small Business Administration (SBA) office. They can be very helpful and provide you with many ways to find information on the various funding sources available, as well as give you contact information for the source itself.

Private versus Public Funding

  • Identifying public versus private sources of small business funding is also important. The requirements for public funding differ from those for obtaining private dollars.  In many cases, governmental monies available, aside from direct loan and grant programs are made in the form of guarantees provided to private lenders.
  •  This public-private partnership means that a small business owner will need to understand and meet the loan requirements of both the government agency providing the guarantee and the lending institution making the loan.

Eligibility Requirements

Eligibility requirements for the various funding programs are also important. The requirements vary depending on the amount, and type of funding. Understanding the requirements can help the businesses plan for the future.

Maintaining a checklist for funding is a smart way for a small business to determine which sources are appropriate and meet their needs for financing their small business.