4 More Ways to Get Small Business Funding That Fit Your Needs

Up from a year ago, nearly 70 percent of small business owners say they were planning or needing financing this year, reports Business Wire, referring to a recent JP Morgan survey.

And they’re increasingly seeking new ways of financing and funding, says JP Morgan's 2022 Business Leaders Outlook Survey.

Here are several routes - new and familiar - to find financing for your small business.

Community Advantage Loans

Through an extended pilot program, the SBA offers Community Advantage loans for the credit, management, and technical assistance needs of low-income borrowers and small businesses in underserved markets.

The Community Advantage (CA) loan program was initially set to expire in September 2022 but was recently extended to Sept. 30, 2024. 

Also recently, the SBA announced the expansion of the loan program. It now has a higher maximum loan amount - now $350,000, up from $250,000) and includes more nonprofit community lenders.

“These loans allow small business owners the flexibility in capital they need to sustain their operations, including covering payroll, making business improvements, buying supplies, and hiring employees,” said John Arensmeyer, president and CEO of Small Business Majority, in the SBA’s press release.

If you’re interested in one of these Community Advantage loans, check to see which local financial institutions, Community Development Companies (CDCS), or microlenders partner with the SBA for this program.

Nontraditional Financing

Nearly half of the small businesses in the JP Morgan Chase survey said they plan to use business credit cards (48%) to help raise capital and finance their goals, up from 38% a year ago. 

A line of credit was the next most common funding method identified by the small business owners in the survey.

Most of the small business owners surveyed (68 percent) said they plan to explore online lending options, up from 56 percent a year ago. 

Small Business Grants

A growing number of grants are popping up for small businesses, particularly those in certain populations, industries, or geographical locations.

Suppose you were among those who sought pandemic-relief funding through the American Rescue Plan Act or ARPA. In that case, you may realize the intense competition with grant funding applications.

But it can be worth it to try if you do fit specific criteria of a grant, such as being veteran- or woman-owned, located in a rural area, etc.

There are grants for small businesses offered at foundations, government agencies, and nonprofits to foster entrepreneurship, such as local Small Business Development Centers (SBDCs), which are often connected to local academic institutions.

Or, you might find your business qualifies for corporate-based grant opportunities or grant funding offered through industry or trade groups.

The federal government is the biggest distributor of business grants in the U.S., covering a range of industries and intended purposes.

“Grants can be awarded for a wide-variety of activities, such as innovative research, recovery initiatives, infrastructure building, or any of the other hundreds of funding programs,” explains the federal website, grant.gov.

Startup Funding

If you’re a new entrepreneur, microloans might be a funding option to consider.  

“Microloans can be a good fit for business owners who might struggle to qualify for traditional financing, including startup founders and people with limited credit history,” says a Nerdwallet story by Benjamin Pimentel and Randa Kriss.

Alternative lending models can be found through microfinance organizations or the SBA, which offers loans of up to $50,000 for small businesses looking to start or expand. The average SBA microloan is about $14,400, according to the Nerdwallet post.