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  • Step 1: Take a Personal Inventory
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  • Step 3: Build Business Credit
  • Step 4: Prepare a Business Plan
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  • Step 5: Identify the Financing Options
  • Step 6: Make the Pitch to the Right Financing Source
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Step 3:  Identify The Financing Options

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Determining what financing options are available depends on several factors:  personal assets, personal credit history, business assets, and amount of funding requested relative to the business cash flow, equity, and purpose.  Many of these answers depend on how much money you need relative to how much money you are putting into the deal.  What your company's assets? Will there be real estate, machinery, equipment or simply you and your talents? All of these questions will determine the type of financing or funding that you can hope for to finance your small business endeavor.

The approach to use when selecting the option that’s right for your business is as follows. If you or your business have no assets then approach only sources that don’t require a hard collateral. If you’re a startup business and have no financial history, don’t approach a lender that requires an established track record. Investors are slightly different from lenders, as they are looking for return on their investment or ROI. The ROI might come in many forms. For example, they may require periodic payments similar to what a lender does. They often require equity or shareholder percentage in your company. 

Below are lists of potential sources for equity, debt, and creative financing options.

Sources of Equity

· Checking & savings 
· Selling Assets
· Income from Second Job
· Money from Retirement 
· Cash on Life Insurance
· Friends and Family
· Angel Investors/Networks
· Investment Clubs
· Venture Capital Firms
· Corporate Investors
· Partner Buy-In
· Mergers
· Direct Public Offering
· Employee Ownership 
· Buying Equipment
/supplies in exchange
for Equity 

Sources of Debt

· Credit Cards
· Charge Cards
· Home Equity Loans
· Lines of Credit
· Bank Loans
· Micro Loans
· SBA Loans
· Asset-Based lending
· Peer-To-Peer Lending 
· Seller Financing
· Equipment Leasing
· Equipment Loans
· Franchise Financing
· Landlord Financing
· Import-Export programs
· Mortgage loans 

Creative Sources

· Customer Financing 
· Factoring Acct Receivables
· Purchase Order Financing
· Vendor Financing
· Merchant Card Advances
· Sale and Leaseback
· Bartering 
· Sub-Leasing Your Space
· Grants 
· Donations—Crowdfunding
· Competitions and Awards
· Franchising Your Business
· Licensing Rights to Your Product or Service
· Sponsors/Advertisers 


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