Maintaining substantial funding for small business startups and working capital is vital for continual sustainment. Business plans, strategies, and models often need to be overhauled & businesses may go through a lean patch. But, with proper working capital, the risk of bankruptcy decreases substantially.
So, what are the different ways to acquire capital funding for small business startups? This article explores 8 reliable funding options.
Eight Excellent Options for Capital Funding
Numerous promising startups with disruptive ideas & advanced technological implementations all over have to shut shop simply because their coffers dried up. And, while many have been able to acquire initial funding from VC firms and startup incubators, in most cases, a lack of capital led to their downward spiral.
Securing a reliable funding source is as important as developing acute strategies & keeping oneself up to date with the market, economic, & tech trends. There are many options for MSMEs: incubators, government grants, VC firms for tech, etc.
We begin by looking at one of the most reliable funding sources for small business startups, startup incubators & accelerators.
Start-Up Incubators & Accelerators
Startup incubators & accelerators may offer pre-seed and working capital funding if they think a startup has a bright future. Africa is witnessing the rise of numerous tech startups and multiple startup incubators that offer consistent funding for small business startups in the tech industry.
Both public & private sector banks and NBFCs offer convenient loans for startups and MSMEs across Africa. While they do offer financing equal to or more than startup incubators & VC firms for tech, a business won’t receive any mentorship or multiple series of funding from any financing corporation.
Alongside VC firms for tech, angel investors are other major investment avenues for tech startups. Most angel investors may operate alongside venture capital firms and startup incubators to offer funds for business startups.
Government Loans & Grants
Numerous governments across Africa offer loans & grants to upcoming businesses at attractive interest rates, favourable repayment tenures, refinancing options, and other beneficial features.
Business and government loans can be considered the most trusted sources of funding for business startups across Africa.
Crowdfunding has become a popular source of acquiring quick funds from patrons online. However, they may not be a reliable source of capital funding for business startups.
Business Credit Cards
Many banks and NBFCs now offer credit cards & lines of credit to emergent businesses. In most cases, the amount available cannot be substantially high.
Peer-to-peer lending has become quite popular recently, wherein other businesses & non-institutional lenders, and investors lend money, usually at high-interest rates.
Venture Capital Firms
Venture capital firms are generally major investment firms that offer both financial support & mentorship programs to tech firms. VC firms for tech startups across Africa play a crucial role in the phenomenal growth of the African tech industry.
Blaq Ventures intends to be one of Africa’s largest VC firms for tech startups and offers dedicated support & funding for small business startups across the continent.
Innovate, Disrupt, and Rise Above With Africa’s Leading Venture Capital Company
At Blaq Ventures, we invest in leading startups in the African tech industry. We intend to be the foremost VC firm for tech startups and offer pre-seed funding to tech startups, dedicated mentorship programs, help business owners devise effective business strategies & implement agile models, and expand network connections.
If you think your business is the next BIG THING, connect with Blaq Ventures and take your business sky-high with comprehensive support.
Please find out more about us here!