CNN‘s Tom Foreman explains in the network’s “Explain it to me” video series how the “presidential dash for cash” (in political parlance, campaign fundraising) laws and strategies work in simple terms. While watching the video, I realized that much of this is counter to Small Business financing and funding. Primarily, the subject of access to that capital to start or expand a Small Business. In campaign fundraising, as Mr. Foreman explicates, you can raise your own funds just like most of us who began our own businesses, but with presidential campaigns you can also choose to get matching funding from the federal government. We mere mortals do not get this preferential benefit if we go to the federal government and tell them we’d like to start a Small Business. Something mostly understood is that most funding for these presidential (and likely Congressional) campaigns come from a limited number of large donors and less of the funding comes from small-dollar donors. However, in Small Business, we have more opportunities than ever to find funding in creative ways since most small businesses can start with less than 5,000$ in capital (although 10,000$ is the average amount spent and asked for in small business loans).
If you’re looking for funding for your startup or expanding Small Business, don’t follow the norm by looking solely to financial institutions (and don’t leave them out of the funding portfolio either!) and borrowing money from family and friends (who more and more because of the economic downturn are weary to invest in new ventures). Here are a few resources for Small Business capital resources:
- Crowdfunding: this is a relatively new concept, where you can ask many people to held invest small amounts to a larger loan amount (keeping their risk and your interest payments low); there are sites like MyMicroInvest.com and Prosper.com but there are many more players out there (so do your due diligence to make sure the sites are legit);
- Bartering: the age-old concept of bartering with other Small Business owners here in Alexandria and the surrounding area is alive and well; learn more about bartering at the International Reciprocal Trade Association website; and,
- Sell your Accounts Receivables: not a new concept either, it’s mostly unknown to expanding small businesses; if you have a healthy Accounts Receivable and are looking to grow your business, there are businesses that will help you do what is technically known as factoring.
Do you have other resources for finding capital for your or fellow small business? Post them in the comments!
- Alexandria SBDC – 15 Years of Serving Small Businesses (alexandriasmallbusiness.com)
- Why You Need a Budget & How to Build a Budget for Your Small Business (enmast.com)
- Why Women Business Owners Still Struggle, Facebook Shopping and More (smallbizdaily.com)
- Crowdfunding for Small Businesses with Lucky Ant (swipelyworks.com)