Alternative Funding Sources

The number one obstacle for most budding entrepreneurs starting a business is not businesses plan.  Unfortunately is it not having enough capital for start up costs and a years worth of funding for operation.  Far too many entrepreneurs are under the assumption that the current economy has caused funding capital for new businesses to dry up. This is further from the truth venture capitalists and investors have changed their criteria in how and what they invest in.   There are funding sources available if new business owners know where to look.

Depending on the type of business you want to start up, there are hundreds of funding sources for new businesses.  One particular source would be the SJF Ventures invest in business that have $1MM to $20MM in revenue and are poised for rapid growth.  SJF invest in businesses that are seeking $1MM-$2MM initially.SJF has offices in California, New York, and North Carolina.   This type of investor would best suit a business that is already in existence and looking to increase and expand its operation. SFJ Ventures was a funding source found on the Community Development Venture Capital Alliance website (www.cdvca.org).  The CDVCA provides private equity capital to businesses in underinvested markets.  Each member of the community has its own requirements and qualifications for apply to obtain funding.

Another great funding source for new businesses would be through private investors from the Native American community.  Native Americans have quietly accumulated wealth through the ownership of gaming casinos on reservations.  Government grants given to Native American non-profit organizations are another source to find start-up capital.  The First Nations Development Institute is a grant-making program that provides technical and financial resources to tribes and Native nonprofit organizations. Keep in mind that this site is for Native Americans and it’s tribal nations, so any other groups would not qualify for funding.  This is a great place to seek potential investors for your business from Native Americans.

The Opportunity Finance Network is a membership-based network that funds opportunities for members.  The OFN is a community development of financial institutions throughout the United States that provide funding to stabilize communities. These funds are in the form of loans and investments that range from $100,000 to $3 million in terms lasting from 3 to 10 years.  New business owners could benefit from using his network to find start up capital.   

Finding capital to start a new business is not always difficult.  Researching non-traditional funding sources could prove successful for anyone looking to find capital. There maybe advantages and disadvantages to using non-traditional funding sources. Some advantages are that investors who view themselves as non-traditional funding sources are more likely to meet with people looking to start a business.  Investment capital is reserved for individuals who desire to start a business. Qualifications and application process is more lenient than traditional funding sources.  The disadvantages are funding is restricted to certain types of business start-ups.  The amount of start up capital may be available for only certain period of time.  Start-up capital is available on a first come first serve basis.  Despite the advantages and disadvantages non-traditional is an arena that new business owners should not overlook.

Sources

http://www.opportunityfinance.net/

http://www.cdvca.org/

http://www.firstnations.org/default2.asp?id=69

http://www.sjf.com