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Start-up company funding not limited to traditional loans

Start-up companies often have variety of capital needs, including investments in equipment, software and office space. Would-be entrepreneurs in Ohio likely wonder where all the money comes from that is needed to grow the profitability of a business. In only 8 percent of cases does a start-up company receive capital from bank loans, but there are a few alternatives

Entrepreneurs looking to make their mark in an innovative way may need to look no further than crowdfunding. Regardless of the stage of business formation, anyone can make a pitch on one of the major crowdfunding websites. Not all platforms are created equally, however, and it may be that one is a better fit for a particular start-up company. Crowdfunding is aided by social media efforts, such as regular postings, videos and personal connections.

A business start-up looking for more traditional funding could seek a loan using a Small Business Administration program. These loans go through a bank but carry an SBA guarantee in part, which can lower collateral requirements and make the applicant more appealing to risk-adverse banks. An understanding of business law can inform efforts to secure capital, from these and other sources.

An entrepreneur is most likely to garner the trust and good-will of investors by creating a solid plan. Typical topics in a plan include market research, the ways that the capital infusion will be spent and a time-frame for reaching profitability. In short, investors do not like surprises. Entrepreneurs can help assure investors by enlisting the assistance of legal counsel experienced in providing advice and counsel to start-up companies.

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