HOW TO FINANCE YOUR NEW BUSINESS

GOT FUNDS?

Are you a current or aspiring innovator, but need help financing? E. Jones Law & Policy has some valuable information to help you!

For companies seeking capital, financing falls into two types: Debt or Equity. Debt involves borrowing money that requires repayment, and the repayment most commonly includes interest on the amount borrowed. Equity involves raising money through selling an interest in the company. Attracting equity can sometimes be through finding “Angel” investors, who are usually high net worth investors seeking big returns through private Investments in start-ups. Or, venture capital funding is another equity option provided by investors with perceived long-term growth potential.

Seems too convoluted? Luckily, there are many resources that are available! This blog contains a number of hyperlinks for you to access different websites with loan and investing opportunities for your company, no matter how big or small.  

The Kentucky Cabinet for Economic Development has great financing resources for entrepreneurs! I have added their chart to this blog. Click here for the descriptions.

You can access another helpful chart from Louisville Metro that describes different financing sources for your business as well. You can access the different opportunities through Louisville Metro here.

You are just a click away from financing your business! The local Small Business Administration and KIVA also provide other opportunities in the form of loans with varying interest rates.

SBA(KY District/Louisville)- The Small Business Administration has a loan program with SBA approved lenders. The maximum loan is $5 million.  There is no minimum amount. However, the United States average loan was $371,628 in 2015. Interest rates vary. There is also a local SBA KY District that can aid you in your entrepreneurial endeavors. For all those nonprofits and community-based organizations out there, SBA also has Microloans specifically for you. The average loan amount is $13,000. Interest rates can range from 8-13%. When you are ready to connect with SBA lenders, it is an easy 3-step process to begin, and you can click here.

The SBA can also provide technical expertise and helpful information.

The SBA website has a learning center of free 30 minute video-courses of different elements of entrepreneurship. Topics include accounting, customer development, sales, and more. View the list here. After each video, you can receive a certificate of completion. In addition, SBA has a specific course for millennials here. This course introduces the basics of creating and financing a successful business.

KIVA Louisville City- KIVA is a nonprofit organization that provides a platform for small business owners to get financed and to get connected with lenders. Louisville, KY has a KIVA program and was the 9th KIVA city in the United States, gaining this distinction before New York, NY. It is a partnership of local community groups, microfinance organizations and Kiva Zip Trustees. One of the major perks is that this organization offers 0% interest rates. No bank can top that! This method of financing is especially helpful for borrowers who may have difficulty accessing loans from more traditional lenders. Go to Kiva for more information!

5- Easy steps to apply.

  1. Fill out an online application.

  2. Join their community by making a loan to another small business

  3. Invite your family and friends to lend to you to prove your worthiness.

  4. Fundraise by getting posted on KIVA.

  5. Repay your loans.