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Financing Your Own Business

April 20, 2017

Starting Up

Your business ideas are turning into a reality. You’ve done the research, estimated your start-up costs, written your business plan, and now you’re ready to tackle your financing.

There are multiple ways to fund a new business and we recommend researching each of them carefully. The decision you make could have a dramatic effect on the financial future of your company.

Funding Options

Debt Financing – Funding with loans (SBA, real estate, business loans, and more), credit cards, and lines of credit. You must pay all the money back whether your business succeeds or not, but the profits and control are all yours.

Equity Financing – Money secured by selling ownership in the company. It is a way to obtain money without incurring a lot of debt, but you must also share profits and ownership.

Grants – There is a wide range of programs available at the federal, state and local level. The Small Business Administration (SBA) website is a good place to start, www.SBA.gov.

Venture Capital – Generally used when traditional financing isn’t an option, it is usually an investment of cash in exchange for shares and a role in the company. The cash typically comes from high net-worth individuals or venture capital companies.

Peer-to-Peer Lending – This method finds funding in Internet-based companies that connect borrowers with investors.

Staying Afloat

A big part of keeping a business afloat is successfully balancing the management of money with the need to modernize equipment and build new product – all of which you need to stay relevant over time. To help, there are short-term funding products to assist in evening out cash flow and keeping your business in forward motion.

Funding Options

Short-term Loans – Often used for working capital, to get you through slow periods.

Credit Cards – Help you better manage your daily cash flow and keep expenses organized.

Operating Line of Credit ­– This option provides instant access to a line that is available to pay down and use again as needed.

Growth and Expansion

The resources you need to fund Growth and Expansion are essentially the same as those available to you as a start-up. And there is almost as much planning involved. Making sure you have a detailed and accurate cash flow plan is very important at this point, as costs are going to rise quickly. Often faster than revenues.

As Wisconsin’s #1 SBA lender, Bank Five Nine takes great pride in helping the businesses in our communities flourish. No matter what phase your business is in, we are here to help! Visit our Business Lending Solutions page to learn more!

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