(Branded) Rolling in the Startup Business Capital Dough

You don’t want to have a lack of a trust fund get in the way of your goals of owning a business, but most startups take more than what you have in savings. Exploring various lines of credit, instead of focusing entirely on bank loans, provides more chances for a small business to get the funding it needs. Don’t give up on your idea when a microloan can get you on the way to success. Here are several types of funding options your small business can take advantage of.

Credit Cards

While you can use personal credit cards to fund your business ventures, a business credit card is the better option. Your first few business credit cards may require a personal guarantee, but once you’ve established a business credit report, you can separate your business and personal credit accounts entirely. This type of financing for your small business is a way to easily keep track of company expenses, control your day-to-day spending and get fraud protection for your business. You also have the ability to set spending limits to individual users, if you’re providing employee credit cards.

Vendor Accounts

Many vendors offer accounts for businesses that work with them often. These credit accounts are for that particular vendor only and are similar to store charge cards in the consumer world. When you want to use your vendor account, you place your order and put it on that line of credit. You have a specified amount of time to pay off the invoice, such as net 30 (30 days) or net 60 (60 days) terms. Over time, the amount of time you take to pay may increase as you build trust with that vendor. This is one of the better lines of credit options if you are starting in the business world with bad personal credit.

Peer-to-Peer Financing

Peer-to-peer financing is a lending model made popular by sites such as Prosper.com. This financing method cuts out banks and other lending institutions. Instead, the loans are made directly by individuals using the service. This line of credit works as a normal installment loan otherwise. You make monthly payments to the service, which distributes it to all individuals who provided you with the peer-to-peer loan.

Small Business Administration Loans

The Small Business Administration has several loan programs available for small businesses, such as 7(a) loans and microloans. The 7(a) loan is available for for-profit businesses who are based in the United States, have already looked for other sources of financing, can show that getting the loan is needed to keep the business growing and does not owe money to the U.S. government. The SBA loan process is somewhat extensive compared to other lines of credit, but it’s not as complicated as getting a bank loan for your business.

Your small business could also ditch securing credit and go the crowdfunding route, using a service such as Kickstarter to present a general idea before garnering funds you don’t need to pay back from supporters. What method of startup financing do you recommend for small businesses? Tell us in the comments.

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LAUNCH. is a community-powered platform on a mission to propel the future of startups in Texas.