Funding for Entrepreneurship

Entrepreneurship, simply, is the act of starting, nurturing, and properly managing a specific business. As per economists, entrepreneurship is part of the resources that are put into the groups of where it is important for production.

An entrepreneur is a person who ventures out, starting a new business by assembling labor, natural resources, and goods for a business to operate. As for many types of profession, entrepreneurship needs funding, too.

You Don’t Need to be Rich to be an Entrepreneur

Have you ever heard of the statement “you don’t need to be a millionaire to be an entrepreneur?” That is mostly true, but only some. In reality, you need money to start a business – you need money to be an entrepreneur. You don’t have to be wealthy to be one but you need money to launch yourself into the high valleys of entrepreneurship.

That being said, there are a lot of programs in funding for entrepreneurship; programs that can be categorized into two: equity and debt. Both of them are a lot different but both of them have the same goal – to finance entrepreneurship.

Equity Financing

This type of entrepreneurship financing is when an entrepreneur decides to approach investors, selling a portion of their company for them to get money in return. For instance, you need to raise at least $50K worth of funds for your new business, the investor gives you this amount but in return, they’ll own 25% of the company.

Most of the time, these investors could be Angel Investors, Venture Capitalists (VCs), and crowdfunding investors. However, there could also be investors in your group of friends, your family, or even some of your relatives that you can approach and ask if they’re ready and willing to invest on your business.

For equity financing, make sure that you have a pitch prepared so that you can communicate your thoughts with any investor.

Debt Financing

Probably the more common type of entrepreneurial financing, it’s when an entrepreneur applies for a loan either from a bank, a business funding or a lending company, a credit union, or through the Small Business Administration (SBA).

These lenders would provide the funds to the entrepreneur under a term; a term that dictates how much the borrower should pay either in a weekly or in a monthly basis with interest on top of it.

So these types of financing entrepreneurship are the options you have – what would be the better option for you? Which path would you choose? For most entrepreneurs, approximately about 59%, they chose debt financing and they’re surely happy with their decision.

Factors You Should Look For

In looking for the best options for entrepreneurship funding through debt, you need to decide on the following things so that you can land the best options possible. These include:

• The amount you want to borrow
• What you’ll be using the amount for
• How much you’re willing to go with the interest
• When you plan on paying it back

In most cases, a business loan would be when an entrepreneur applies for a loan to purchase something big – it can either be a real estate property, an asset of any kind, or another business. However, there are open-ended loans like credit lines which allow entrepreneurs to play with how much they need.

Then, the lender would provide the borrower with a pool of funds where the borrower can draw money and pay interest with how much they’ve taken or drawn.

Finding the Best Rates

Honestly, the best rates out in the market are with banks and credit unions. They offer the lowest interest rates and you can enjoy it – if you are willing to wait for 3 to 4 months before the funds get dispersed.

Here with us at SoFlo Funding, you can get funds of up to $500K; it can even go beyond that given that you have a good credit rating, or if you decide to place a collateral behind it.