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What to do when you can’t find investors

You have a great idea for starting a small business and have put together a solid business plan. You’re all set to go – but you can’t seem to find any investors willing to fund your start-up. You’re afraid it’s going to fail without ever getting off the ground, but never fear.

There are a number of funding options available for your small business outside of single investors. Utilising a number of business credit cards, loans, and grants, you can get the funding your business needs to start serving customers and earning money.

Credit cards

According to Timothy Faley at the University of Michigan’s Ross School of Business, half of all start-ups are funded by the owners’ credit cards.

  • Be mindful of the dangers of credit card debt – paying only the minimum payment on your balance can end up costing you thousands of dollars in interest and drive you into a pile of debt you can’t get out of.
  • Missing payments on credit cards can damage your credit rating, reducing your likelihood of getting further funding.

Bank loans

Various types of funding are available at your local bank if you have a good relationship with them and can prove that your business plan is solvent. A start-up business loan can be your best option.

  • Line of Credit: If you have a valuable asset you can use as collateral, your bank can extend you a line of credit up to a certain amount. You only pay interest on the amount of credit you actually use, not the amount you have access to.
  • Personal Loan: With your home or business as collateral, the bank can offer you a lump sum, on which you have to pay the interest and principle back over time.

Whereas missing payments on unsecured debt can only damage your credit score, missing payments on secured bank loans can result in the bank seizing your assets – including your home.

SBA loans

The Small Business Administration can guarantee your commercial loan for a bank that otherwise would not led you funds. It does not provide loans directly, just makes it easier for small businesses to get them.

  • In order to be eligible, your company must meet the SBA’s definition of a small business for your industry and may need to meet other criteria as well, depending on the type of loan.
  • Since the SBA does not provide the loans directly, you need to apply through a financial institution that processes loans on behalf of the SBA. The qualifications for an SBA loan can be more stringent than those of a regular bank loan.

Micro loans

Nonprofits, government agencies, and micro lenders often offer micro loans to small businesses in amounts under 25K. In addition to offering smaller loan sizes, they often require less documentation than traditional bank loans and provide more flexible underwriting criteria.

  • Micro loans can be a valuable resource in the event that you have a lack of credit history, lack of secure collateral, or the inability to secure a loan through a bank.
  • Many dispensers of micro loans focus on economically deprived communities and minority groups, so check if your business can be classified under these categories.


Grants differ from loans of all types in that you do not need to pay them back. However, there may be more restrictions on how you can utilise the funds for your business and more oversight of your business from an outside group.

  • Small Business Innovation Research grants are available through the federal government for small businesses in the technology sector.
  • Grants for women and minority-owned businesses are also available through the federal government.

The high amount of competition for grants means that, should you receive one, it can help to attract other funding for your business through banks and investors.

Don’t get discouraged if your initial attempt at securing start-up funds falls through. Your business can obtain all the capital it needs if you look further afield and investigate what credit cards, loans, and grants have to offer.


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Megan Webb-Morgan

Megan Webb-Morgan

Megan Webb-Morgan is a business blogger, focusing on topics important to startups and small businesses. She writes for <a href="http://www.resourcenation.com/?utm_source=guest-posts&amp;utm_medium=content-mktg-ext&amp;utm_content=megan&amp;utm_campaign=brand">B2B lead generation company ResourceNation.com</a>. You can find Resource Nation on <a href="https://twitter.com/resourcenation">Twitter</a> and <a href="http://www.facebook.com/ResourceNation">Facebook</a>!

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