Explore Effective Business Funding Solutions for Growth

How do small businesses find the money they need to grow? Most can't rely on revenue alone. In fact, 43% of small business owners applied for funding in 2022, according to the Federal Reserve's Small Business Credit Survey.

That shows just how common the need is. Business funding solutions can help owners cover costs, hire staff, or expand their services. Today we're taking a closer look into different funding options, including loans, grants, and investments, and how each one can support growth depending on your goals and financial situation.

Why Business Growth Requires the Right Funding

Every business needs money to grow. Without the right support, growth can slow down or even stop altogether. There are three primary ways funding supports growth:

• Hiring and workforce expansion
• Equipment, inventory, and technology upgrades
• Marketing and outreach efforts

Hiring and Workforce Expansion

Bringing on new staff costs more than just wages. Training, benefits, and added payroll taxes can add up fast. A business needs enough working capital to cover these costs before the new team members start bringing in more revenue.

Equipment, Inventory, and Technology Upgrades

Many businesses outgrow their tools or supply levels before they're ready to scale. Having capital for entrepreneurs helps cover new equipment, software, or bulk inventory, so the business can keep up with new demand.

Marketing and Outreach Efforts

Growing a business means reaching more customers. Paid ads, new branding, and customer outreach all require money up front. These efforts can boost visibility and drive more sales, but only if the business has enough funds to invest in them.

Overview of Business Funding Solutions

Some options offer fast access with little paperwork, while others take time and require strong financial records. There are three common types of business funding solutions used today:

• Debt-based funding like loans or lines of credit
• Non-repayable sources such as business grants
• Equity-based options like investors or crowdfunding

Debt-Based Funding Like Loans or Lines of Credit

Many businesses start with a small business loan or a line of credit. These allow owners to borrow money and pay it back with interest.

Banks, credit unions, and online lenders all offer this type of funding. Terms vary, but these options are often used for buying equipment, hiring staff, or covering slow seasons.

Non-Repayable Sources Such as Business Grants

Some businesses qualify for grants through government programs or private groups. These don't need to be paid back, but the rules can be strict. Grants often support specific industries, regions, or goals like clean energy or job creation.

Equity-Based Options Like Investors or Crowdfunding

Instead of borrowing money, some owners raise funds by giving up a share of the business. It might involve angel investors, venture capital, or public crowdfunding platforms. These funding options work best for businesses with strong growth potential that need large amounts of capital for entrepreneurs.

Small Business Loans: Traditional but Still Useful

Small business loans are one of the most common ways owners get the money they need to grow. These loans usually come from banks, credit unions, or online lenders.

They give businesses a set amount of money, which must be paid back with interest over time. Some owners use these loans to buy equipment, hire more staff, or improve their location. Others use them to cover short-term gaps in cash flow.

Most lenders look at credit scores, business history, and yearly income when reviewing loan applications. Owners with strong financial records tend to have better chances of approval and lower interest rates.

Newer businesses or those with poor credit may need to offer a personal guarantee or collateral. That means the owner is responsible for repaying the loan if the business can't.

Grants: A Competitive but Free Source of Capital

Business grants can give owners access to money without the pressure of paying it back. It makes them one of the most appealing funding options.

Grants often come from government programs, nonprofits, or private companies that want to support small businesses. While this sounds great on the surface, getting a grant can be tough. Many programs have strict rules, and the process takes time.

Most grants are created for specific types of businesses. Some focus on women-owned or minority-owned companies. Others support green projects, community programs, or tech development.

To apply, a business usually needs to write a detailed plan, explain how the money will be used, and show how it meets the grant's purpose.

Winning a grant can be a big help for owners who don't want debt. Still, not every business will qualify. That's why many people treat grants as just one piece of a bigger funding plan.

When used along with loans or other sources, business grants can help fill gaps and ease financial pressure. For any owner looking for capital for entrepreneurs, it's worth checking to see if a grant might fit.

Equity and Investment Opportunities

Some businesses need more money than a loan or grant can offer. In these cases, equity and investment opportunities can help fill that gap. This type of funding means giving investors a share in the business in exchange for capital.

It often works well for businesses with strong growth plans that are ready to scale. Owners give up some control, but they may gain valuable support and resources along the way.

Angel investors are one option. These are people who invest their own money in new or growing businesses. They often bring experience and connections that can help a business move forward.

Venture capital is another path, usually for larger investments. These funds come from firms that look for high-growth businesses with long-term potential.

Crowdfunding is another route. It allows businesses to raise money online from large groups of small investors or supporters.

Capital For Entrepreneurs

Business funding solutions come in many forms, from loans and grants to investors. Each option supports growth in different ways.

At Riverpoint Capital, we've spent over a decade helping businesses find the right funding. We understand that not every owner is a finance expert, so we tailor financing plans to your goals. Whether you need a bridge loan or inventory funding, we're committed to your long-term success and growth.

Get in touch today to find out how we can help with your funding!