73.1% of participants in our survey of almost 1,000 small business owners said they wished they applied for more funding in 2022. While we can't turn back the clock, Skip is here to make sure more small business owners take advantage of available funding opportunities in the new year, especially as we enter into a recession and see funding opportunities dry up.
Here are the top five funding options for your business. Click here to watch on YouTube.
5. SBA Loans
While many business owners are familiar with the U.S. Small Business Administration (SBA) thanks to its EIDL program, there are several other funding opportunities worth looking into now that EIDL funding has concluded.
7(a), 504, and Microloan programs are the SBA's current funding opportunities.
Here's what to know:
SBA 7(a) Loans: These are loans of up to $5M that can be used for the purchase of real estate, equipment, machinery, furniture, or supplies for your business.
You can also use a 7(a) loan to establish a new business, acquire an existing one, construct a new building, or refinance business debt. These loans are intended for business owners who have been declined access to other funding sources.
Learn more about the 7(a) program and how much you could be eligible for in our video here.
504 Loans: Like the 7(a) loans, 504 loans can be given up to $5M and can be used to purchase real estate, property, and long-term machinery.
These loans have a different structure, though: The borrower provides a 10% down payment, while a Certified Development Company (CDC) provides 40% of the loan amount and the lender provides 50%. Almost any small business can get approved for these loans, so long as they are still in the beginning planning stages.
Microloans: Microloans can be given up to $50K. These loans can be used for working capital, inventory, supplies, furniture, fixtures, machinery, and/or equipment. These loans are designed to help businesses start or expand and are administered to businesses that would otherwise have trouble getting a loan, like startups, business owners with less-than-ideal credit, and those in underserved communities.
Figuring out which SBA option is right for you and navigating the application process can be difficult, but Skip is here to help! If you're interested in learning more, schedule time to talk with our team.
Explore the Employee Retention Tax Credit (ERC) if your small business has employees. The ERC is a refundable credit that lets small business owners claim a tax credit for a portion of wages paid. Claiming this credit can help you save over $26,000 per employee.
While this credit was created in response to the pandemic, it is still going on. As we move into 2023, small business owners are still able to claim partial credits.
Click here to find out if your business is eligible for ERC funding.
In 2021, President Biden singed the American Rescue Plan Act, which funded the State Small Business Credit Initiative (SSBCI). Originally, the SSBCI was created in response to the Great Recession. This time, the SSBCI was reactivated in order to help small businesses recover from the global pandemic. Now, it's worth $10 billion. The funding is being distributed through a mix of loan, equity, and venture capital programs.
With a fund this large, it's no surprise that the rollout is happening slowly and in stages. Each state is in charge of creating its own rollout plan and creating its own SSBCI programs. This means that the application process will look different depending on where you live.
You can fill out this form to receive the latest SSBCI alerts and read the list of current approvals.
2. Private Funding
When it comes to funding your business, we recommend diversifying your funding sources. That way, you're never completely reliant on one opportunity. Pursuing private funding is a great way to secure additional funding for your business, especially if you're looking for a line of credit.
Many small business owners want a line of credit as a backup fund. This is a great option because you can draw funds as you need them and only pay for what you use. This means that, unlike loans, you won't be charged interest on money you're not yet using.
When it comes to securing a line of credit from a private source, Skip recommends Bluevine and Fundbox. You can read more about each option here.
There's a reason grants are the holy grail of small business funding: it's free, no-strings-attached money that you'll never have to pay back.
Of course, this makes grant funding extremely sought after. You'll want to do your research and only apply for grant opportunities that are aligned with your business goals and needs. This way, you have a strong change of being a stand-out applicant.
Grants can come from a variety of sources: the government, community agencies, nonprofits, and even private companies. A few notable grants to have on your radar:
Skip Monthly Grants: Here at Skip, we give out $1,000 grants every single month. Be sure to apply!
$60k Barclays Small Business Grant: Barclays is awarding 60 grants from $2K to $60K to US based small businesses. Find out more here!
$30K FedEx Grant: FedEx is giving $30K to a small business that uses shipping in their day to day operations. Learn more here!
Make sure you subscribe to Skip to receive the latest updates on current grant opportunities.