What is Capital?
For almost all businesses, capital is essential. While in simple terms, capital is the money or resources needed to open, operate, and profit; capital is more complex in the sense that it can come in many different forms.
For some businesses, the resources necessary for operating come from traditional lenders such as bank loans, Small Business Association loans, or even personal credit cards.
Yet there are plenty of alternative ways to access capital. For instance, many businesses are finding that their ability to access capital is related to the source–businesses may have a higher chance of getting loans and investments, if they look outside of traditional sources. From CDFI (community development financial institution) reserves to crowdfunding to loans reserved for special groups, there are countless ways businesses can access capital.
Any problems with accessing capital lie not in the lack of money, but rather in the lack of connection between those who need the capital and those prepared to offer capital. So, while the question “What is capital?” might seem unnecessary, many small businesses have found it to be one of the most crucial questions of them all.
In learning what, exactly, capital means in today’s stressed economy, businesses are better equipped to pursue not only the type of capital, but more importantly the type of lender, they need to connect with in order to sustain their business and ensure growth.
Types of Capital
A traditional loan is a bank loan, pure and simple. But often there’s nothing simple about acquiring one of these loans, even if you go through the Small Business Administration. Click below to find more information on the different kinds of traditional lenders and advice on how to prepare to meet with them.
Alternative loans cover a broad array of business loan options available to start-ups and existing businesses that fall outside of a traditional bank loan. Alternative loans are in demand for one major reason—increasingly, some businesses struggle to obtain a traditional bank loan.
While startups may use many different strategies to grow, each approach has one common denominator: funding. Simply put, it can be extremely difficult for your startup to scale effectively without money. So how exactly do you go about getting funding? And how do you decide what funding options are best for your company? This guide will help answer these questions and more.
Hundreds of online crowdfunding platforms give entrepreneurs a medium to set up their campaigns in a number of ways. From securities-based crowdfunding to rewards-based crowdfunding, small business owners can create an engaged community of continued customers. So, the question is: where do small business owners begin?