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Small Business Funding

2022 Small Business Grants in Review

When Hello Alice surveys our community of more than 1 million small business owners, access to capital consistently ranks as a significant barrier to growth.  We’re proud to work with our partners to provide thousands of small business grants each year to help entrepreneurs grow their companies. As we head into 2023, we want to look back and recognize the latest batch of dreamers named Hello Alice grant recipients this year. Hello Alice 2022 Small Business Grants Stats Hello Alice and its partners awarded 1,008 business grants in all 50 states, plus Washington, D.C., and Puerto Rico. In total, that adds up to $12,873,000 of grant funding distributed in 2022. In addition, our partners offered mentorship, advertising credits, educational resources, and other forms of support as part of certain grant programs. Recipients told us these grants would be used to fund: general operating expenses, utilities, rent, permits, licenses, and/or cost of goods sourcing or expanding inventory marketing/advertising developing a new product or service hiring new employees 2022 Hello Alice Small Business Grant Recipient Demographics Our grant recipients strongly represent all identities and backgrounds that make up the New Majority of small business owners. Specifically, our 2022 recipients are: 75% Female 80% BIPOC 12% LGBTQ+ 23% military affiliated 16% have a disability Full Recipient List of 2022 Hello Alice Grant Programs To learn more about each unique grant opportunity and past recipients, check out the full list and links below: The Accelerate(Her) Fund sponsored by Tiger Global Impact Ventures The Alibaba.com Manifest Grants Program Amazon Black Business Accelerator Connect Amazon Black Business Accelerator (Round 3) Antares REACH Grant Beyond Yoga BGE 2022 Round 1 BGE 2022 Round 2 The BOSS Network and Sage's “Invest in Progress” Grant Democratizing the Friends & Family Round Grant DoorDash Restaurant Disaster Relief Fund (Winter 2021) DoorDash Restaurant Disaster Relief Fund (Spring 2022) Driving Small Business Forward with Progressive® Commercial Insurance eBay Up & Running Grant 2022 The Entrepreneurial Spirit Fund by SIA Scotch 2022 FedEx® Entrepreneur Fund KKR Small Business Builders for Female Founders (Round 7) Local Business Support Fund Small Business Growth Fund 2022 (Round 1) Small Business Growth Fund 2022 (Round 2) Small Business Growth Fund 2022 (Round 3) Sonoma County Alliance Small Business Opportunity Fund More Resources for You Visit the Small Business Funding Center to find new grant opportunities and lending options, including: $25K Small Business Growth Fund, accepting applications until January 6, 2023, from high-growth small businesses $10K Restaurant Disaster Relief Fund, accepting applications until December 30, 2022, from restaurants impacted by natural disasters like fires, floods, and hurricanes Ready to see your name among the list of recipients? Join Hello Alice for free today to be the first to hear about new grant opportunities. Members can complete their profiles and check their Hello Alice dashboards to receive updates about the latest opportunities and solutions for their businesses.
Dec 12, 2022 • 2 min read
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Small Business Funding

Apply Now to the 2022 Stacy’s Rise Project!

Are you a woman-founded small business in the food and beverage industry? Would $15,000 help you support your business and better serve your customers?  Hello Alice and Stacy's Pita Chips have partnered for a new grant fund just for you. All you need to do is apply! What is the Stacy's Rise Project? Hello Alice and Stacy's Pita Chips have partnered to offer the latest iteration of the Stacy's Rise Project. Created to help bridge the funding gap for founders, the Stacy’s Rise Project has been connecting and empowering small business owners for years. But Stacy’s Pita Chips wasn’t always a household name. Marketing, mentorship, and monetary support helped this brand rise from a humble sandwich cart to the nation’s supermarkets. And it’s these same resources that today’s entrepreneurs need to succeed — now, more than ever. The Stacy's Rise Project will award $15,000 grants to 10 women-founded small businesses in the food and beverage industry. For chef Jocelyn Ramirez (pictured above), founder of LA-based Toto Verde and a 2021 Stacy's Rise recipient: "This funding will be used towards our launch efforts for our first plant-based product line of seasoning, helping our community in making more easy delicious, and culturally relevant meals at home." What will $15k help you accomplish? We want to know! Who is eligible for this grant funding?  To be eligible, applicants must: ​​Be a for-profit U.S.- based business selling a consumer packaged good (CPG)Be at least 50% woman-founded (based on original founding, not current investment ownership)Have annualized sales of between $25,000 and $1M. Other eligibility criteria include:  Must be willing to participate in a virtual mentorship programMust not be part of an accelerator program at the time of participation For a full list of eligibility criteria, see the terms and conditions. When is the deadline?  Applications open now through October 21, 2022, at 6 p.m. ET. Apply now! Hop over to our funding center to find even more funding opportunities.
Sep 12, 2022 • 2 min read
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Small Business Funding

Hello Alice Launches Best-In-Class Small Business Credit Card with Mastercard

Hello Alice, the free platform helping over one million small businesses launch and grow, today proudly announced the launch of the Hello Alice Small Business Mastercard as it broadens its suite of inclusive capital products. In partnership with Mastercard, the exclusive payments network, and First National Bank of Omaha (FNBO), the card offers small business owners industry-leading accessibility to tools and services including expert business advice, powerful business insights, cashback, and a unique rewards program featuring the ability to earn points by completing business-advancing activities on the Hello Alice platform. "We designed the Hello Alice Small Business Mastercard to meet the needs of small business owners where they are, breaking longstanding barriers to mentorship, access to credit, and overall financial health for those who have traditionally been denied access," said Elizabeth Gore and Carolyn Rodz, co-founders of Hello Alice, "In times of economic boom and bust, access to capital remains the leading challenge for all small business owners, and particularly for New Majority owners, which is why we continue to focus our efforts on expanding the capital continuum beyond our existing grants and loans programs." To maximize capital accessibility for all small business owners, the Hello Alice Small Business Mastercard will be offered as a traditional credit card as well as one with additional provisions to help with credit-building. For business owners with a limited or poor credit history, the credit-building credit card provides cardholders full card benefits while they improve their credit. In as few as twelve months, small business owners may, subject to credit approval, seamlessly graduate from a secured to an unsecured card, a unique feature in the market. "Small businesses are the backbone of our communities, yet too often face significant obstacles in securing the resources they deserve, particularly if the owners come from underserved communities," said Linda Kirkpatrick, president for North America at Mastercard. "The launch of the Hello Alice Small Business Mastercard is an important step in our mission to build a more inclusive digital economy by providing small businesses with the financial tools and capital they need to thrive, while also advancing our half-billion-dollar commitment to help close the racial wealth and opportunity gap for Black communities." The card is part of Hello Alice's larger Equitable Access to Capital program, a commitment to ensure that all small businesses have access to the capital they need to grow the sustainable businesses that power the national economy. The program provides all of the financial products, tools, and education for owners to scale their businesses, including its own grant fund providing security deposits for high-potential but credit-challenged small business owners. By 2025, Hello Alice estimates that approximately $70 million in grants could fund credit enhancements for approximately 30,000 business owners, unlocking up to $1 billion in credit access. Entrepreneurs who are women, people of color, members of the LGBTQIA+ community, veterans, or people with disabilities continue to face barriers to accessing the capital they need for long-term success. In the latest Small Business Capital Access Study completed by Hello Alice*, seventy-eight percent of small business owners claim access to capital is limiting their ability to manage their day-to-day operations, with Black (84%) and Multi-Racial (82%) owners over-indexing on this claim. Eighty-nine percent of owners claim access to capital is limiting their business growth potential. The added stress of the pandemic and its lasting effects continue to impact small businesses. In a recent Hello Alice survey of Black business owners, 34%** of Black owners cited raising capital as their primary obstacle in 2022. "FNBO has been committed to helping small businesses succeed for 165 years, and we are proud to partner with Hello Alice and Mastercard in this vital initiative to elevate all small businesses," said Jerry J. O'Flanagan, Executive Vice President, Partner Customer Segment at First National Bank of Omaha. Hello Alice serves a diverse community of business owners across the country. Approximately 68% of owners are BIPOC, 63% are female, and 17% are military-affiliated. For small business owners interested in learning more about the card, please visit https://hialice.co/meet-the-card. Please direct all media requests to Renee Rossi, [email protected] *Based on data compiled from 2,978 small business owners across all 50 states. **Based on data compiled from 30,500 Black business owners across all 50 states. ABOUT HELLO ALICE  Founded by Carolyn Rodz and Elizabeth Gore, Hello Alice is a free platform serving more than one million small business owners across the United States. Committed to equitable access to capital for women, people of color, members of the LGBTQ+ community, veterans, and entrepreneurs with disabilities, Hello Alice offers funding, education, tools, and curated opportunities. Working with enterprise business services, ecosystem partners, affiliates, and government agencies, Hello Alice provides its growing community with everything they need to grow their businesses. To learn more, visit www.helloalice.com, as well as Twitter, LinkedIn, Instagram, and Facebook. ABOUT MASTERCARD (NYSE: MA)  Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all. www.mastercard.com ABOUT FIRST NATIONAL BANK OF OMAHA  First National Bank of Omaha (FNBO) is a leader in the credit card partnership arena, with partners in a variety of industries including retail, travel, entertainment, automotive, oil, nonprofits and more. For over 60 years, FNBO has specialized in providing comprehensive credit card programs with personalized service to help its customers achieve their goals. Visit card.fnbo.com for more information.
Aug 16, 2022 • 4 min read
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Small Business Funding

Announcing the Restaurant Disaster Relief Fund Grant Recipients

We’re proud to announce the recipients of the Restaurant Disaster Relief Fund! Each of these 13 restaurants will receive a $10,000 grant for rent, utilities, maintenance, supplies, payroll, and other essential expenses. DoorDash launched the Restaurant Disaster Relief Fund as part of its ongoing five-year, $200 million Main Street Strong pledge to empower local communities. In partnership with Hello Alice, DoorDash has also developed step-by-step guides to help business owners both prepare for a disaster before it strikes and how to recover and rebuild their businesses in the aftermath. "This grant means we can finally begin improvement projects and ultimately reopen dine-in for our loyal guests who have been long-awaiting our sit-down service," says recipient Nur-E Rahman (pictured above) of Jersey City-based Bangladeshi eatery Korai Kitchen. "We are so grateful." Congrats to the recipients below, and save the date: Round 3 of the Restaurant Disaster Relief Fund is currently open and closes on September 23. Apply today! Spring 2022 Recipients Winter 2021 Recipients Looking for more grant opportunities and lending options to the Small Business Funding Center to find more grant opportunities and lending options.
Aug 15, 2022 • < 1 min read
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Small Business Funding

Find and Secure Small Business Funding with These 3 Guides

New Majority business owners say a key barrier to fundraising is not knowing what to expect. And we don’t blame anyone for feeling this way — fear of the unknown is real. As business owner Gwendolyn Washington told the Kaufman Foundation, “What you lack [is] the community ... a line of people who you already know who can teach you and support you.” To help break down this barrier, Hello Alice has partnered with Silicon Valley Bank to create a milestone with practical steps for fundraising preparation and all it entails. Broken down into three guides, this milestone includes actionable information to get you on the road to reaching your fundraising goals. In addition to these go-at-your-own-pace guides, we’ll also hosted three, free Ask-Me-Anything events, during which industry experts from Silicon Valley Bank answered any questions about the topics covered in each guide.  Missed the live AMAs? Check out the recordings below to catch up on how to find and secure funding for your business now! 1. Determine How Much to Raise Understanding how much money you truly need is the first step to protecting ownership of your business. Early money is likely the most expensive money you’ll take — and it’s important to ensure it doesn’t come with too many strings attached. The first guide in the milestone, Determine How Much to Raise, will help you through this crucial process. Watch the full Ask-Me-Anything, featuring Silicon Valley Bank's Sophie Nazarian, and Kristin Olszewski, founder and CEO of Nomadica, below! https://www.youtube.com/watch?v=JGUitvnSXEU 2. Design Your Pitch Deck The second guide, Design Your Pitch Deck, will help you craft a solid pitch deck to present to potential investors. Because venture capitalists and angel investors wade through hundreds of startup pitch decks every year, a complete and well-positioned deck can help your business stand out from the crowd. Watch Silicon Valley Bank's Sophie Nazerian and Micaela Amaroli, and Jennifer Richard, Principal at Bonfire Ventures, talk pitch decks below! https://www.youtube.com/watch?v=nquMaLS2uJU 3. Negotiate and Close the Deal The last guide of the milestone, Negotiate and Close the Deal, offers direction once you’ve garnered the attention of investors. With these tips and insights, you’ll be well on your way to securing capital for your business. Silicon Valley Bank's Micaela Amaroli, and Louise Fritjoffson, founder of Martie, walk you through even more tips below. Are you ready to start fundraising and increase your capital? Time to get started! https://www.youtube.com/watch?v=0jfoxmoX1tg For more small business tips and inspiration create a free account on Hello Alice or subscribe to our weekly newsletter.
Aug 9, 2022 • 2 min read
Entrepreneur Sandra Portal-Andreu enjoys chips and dip from her company's sustainable container for small bites.
Small Business Funding

Apply to The Entrepreneurial Spirit Fund by SIA Scotch Today!

If your small business received a $10,000 grant, what would be your next big move?  That’s what we want to know from anyone applying for The Entrepreneurial Spirit Fund by SIA Scotch. What is The Entrepreneurial Spirit Fund by Sia Scotch? Part of the Year of Small Business movement, this grant program addresses small business owners’ number one need: access to capital. Each recipient will receive a $10,000 grant to accelerate their growth and help make 2022 the year of their small business. "The support from SIA Scotch further solidifies our purpose and mission to bring people to the table. !Muchísimas Gracias!" says Sandra Portal-Andreu (pictured above), artist and co-founder of eco-friendly company Tappas, one of twenty five outstanding recipients funded in 2021.  Who is eligible for this grant funding? Eligible businesses must: Be owned 51%+ by person(s) of colorBe a for-profit business producing less than $5M in annual gross revenueOperate and/or conduct business in at least one of the following states: CA, CO, CT, FL, GA, IL, MA, MN, NJ, NV, NY, RI and/or TX.NOT be an alcohol beverage retail license holder (such as a bar, restaurant, hotel, or store which sells or serves alcohol) or a business which makes alcohol Eligible applicants must: Be a citizen or legal permanent resident of the United StatesBe at least 25 years or older as of November 1, 2022 Be the owner or an individual who is legally authorized to bind the Business for purposes of participation in the ProgramNOT have ownership interest and/or be invested in an alcohol beverage retail license holder (such as a business or establishment which owns a license to make, sell or serve alcohol)NOT be an employee of a retail license holder Preference will be given to businesses in the food and beverage industry, such as those who offer products and services across kitchenware, glassware, barware, cocktail mixers, at-home entertaining/party planning, food trucks, cafes, food and beverage blogging, recipe curation, and more.  Additional restrictions apply. See the terms and conditions for details. Do I need to submit a new application if I applied in 2021? If you applied and were not selected as a recipient previously you are welcome to submit a new application. We will evaluate your application based on any new information and judge it against a new pool of applicants! Everyone who applies receives free access to the thousands of curated resources and a community of nearly one million small business owners on Hello Alice. When is the deadline? The application deadline is September 26, at 6 p.m. ET. Learn more and apply today! Still have questions? Read our FAQ. Sponsored by SIA Scotch Whisky. PLEASE DRINK RESPONSIBLY. SIA Blended Scotch Whisky. 43% Alc/Vol. Imported by Diageo, New York, NY. Do not share with anyone under the age of 21. Restrictions apply.
Aug 2, 2022 • 2 min read
Small Business Funding

Announcing the BGE Energizing Small Business Grants Round 2 of 2022!

Maryland small business owners can now apply for the next round of a grant program funded by BGE in partnership with Hello Alice and the Global Entrepreneurship Network. Launched in January 2021, the BGE Energizing Small Business Grants will distribute $5 million to Maryland small business owners seeking COVID-19 relief during this second round of funding for 2022. Eligible businesses located in BGE’s central Maryland service area can apply for a grant of $20,000 each. Applicants will need to demonstrate financial need, and preference will be given to New Majority business owners disproportionately impacted by the pandemic. Applications are now open until August 26, 2022, at 6 p.m. ET.  Applicants must be a for-profit business and an existing BGE electric and/or gas customer with positive BGE credit history. Other eligibility criteria include: For-profit business founded in 2020 or priorIn good standing (or on the way to) with the State of MarylandA maximum of twenty-five (25) employees Annual gross revenues in 2021 of less than $7 million USDDemonstrated need for funding to support business and serve customers If you applied and were not selected for previous rounds of the program, you are welcome to submit a new application. We will evaluate your application based on any new information and judge it against a new pool of applicants!  “Our hope is that the BGE Energizing Small Business Grants will provide much-needed help to hundreds of small businesses in our community, especially historically underrepresented minority and women-owned businesses," said BGE CEO Carim Khouzami. "This is part of a multi-layered plan to provide direct assistance to energy customers, area nonprofits, and government partners to help put Maryland back on its feet for the long-term, as the public health crisis begins to lift.” Hundreds of recipients have been announced as part of the 2021 funding rounds and first round of 2022.  Arion Long, Founder & CEO of Femly, a for-profit social enterprise that increases access to natural & organic feminine hygiene products based in Baltimore, MD, was a recipient of a 2021 BGE Energizing Small Business Grant. She says, “This funding will help our organization scale to stock restrooms and do our part to end ‘period poverty.’” Visit bge.helloalice.com to learn more about the program and apply for the grant today!
Jul 18, 2022 • 2 min read
Black entrepreneur Lorne Jenkins smiles for the camera.
Small Business Funding

Meet the Small Business Growth Fund Recipients

Hello Alice is proud to announce the recipients of the Small Business Growth Fund!  What is the Small Business Growth Fund?  Part of the Year of Small Business movement, the Small Business Growth Fund exists to empower small business owners and strengthen the overall small business economy by addressing SMBs' number one need: access to capital. Now in its second round of funding, each recipient will receive a $5,000 grant, provided by Mastercard, to accelerate their growth and help make 2022 the year of their small business. The Small Business Growth Fund Recipients  Hello Alice is proud to say that many recipients identify as part of the New Majority of small business owners: 67% people of color69% women7% military-affiliated36% LGBTQIA+22% people with disabilities While their businesses span a variety of industries and stages of growth, the recipients all share a common commitment to impact. Each owner told us how they create jobs, integrate social impact, and donate to local causes and organizations. "We are running a camp called Mini Money Runners this summer in Antonito, Colorado," says Lorne Jenkins (pictured above), founder of Mini Money, a financial literacy app and educational program for schools. "The average income in the county is $22,000 and it is 82% Latino. This grant funding will go to funding the financial literacy portion of the camp, and pay teachers to host workshops that cover money, emotions, budgeting, and entrepreneurship throughout the six-week sessions." Get to know the full list of Small Business Growth Fund recipients below, and visit the Small Business Funding Center to find more grant opportunities and lending options. Round 2 Grant Recipients Round 1 Grant Recipients For more small business funding opportunities and inspiration create a free account on Hello Alice or subscribe to our weekly newsletter.
Jul 12, 2022 • < 1 min read
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Small Business Funding

6 Tips for Securing Small Business Investors

Any business owner seeking out investment opportunities should already be proud. If you’re ready to take an investor’s check, you’ve already built a scalable business. That person’s investment will help you hire staff, scale operations, and fully realize your small business dream. But it can be intimidating to find the right investor — not to mention selling your idea as something worth spending money on. Luckily, we have some tips to find small business investors and feel more confident pitching them. Our new Milestone, How to Find Investors, guides business owners through everything they need to know to prepare for capital investment, find investors, and land your pitch. Here are a few quick tips to find small business investors as you get started. 1) Evaluate Your Business Needs First off, determine if your business is ready for outside capital. Not every business is ready for investment, and every business isn’t suited to every form of capital. Save yourself time by asking a few important questions before seeking venture capital. Here are some key questions to ask: Is my venture scalable? In other words, will your business model allow you to rapidly increase sales or revenues without requiring significant changes to how you do business? This is the key requirement for accepting venture capital. If not, don’t worry — grants, credit, and loans are still available and a great option.Do you know what you’re looking for? Before you step out the door, know exactly how much investment you’re seeking and what you plan to do with the additional capital. Investors will write you a check to support your goals, so ensure you have a clear idea of what you need to accomplish those goals — as well as the budget, revenue projections, and other supporting documentation to show you’ll have the resources to get there. Do you have enough time? Fundraising is a full-time job. If you’re devoting your full concentration, ingenuity, and social energy to wooing investors, you won’t have time to manage day-to-day operations. Ensure you have a co-founder, operations manager, or another team member who can assume responsibility. Without the help, your business could suffer. Ready to go deeper on this topic? Prepare for capital investment now. 2) Do Your Research on Investors Getting face-to-face with any investor isn’t too difficult. However, set yourself up for success by doing your homework and get your business plan in front of the right investor most likely to support your mission. The more you know about the investor’s background, portfolio, risk tolerance, and personality, the more likely you will have a match and sell them on your business. Familiarize yourself with investors based on the following factors: IndustryStage of growthValuesGeography Don’t feel the need to learn their life story. However, a few key facts will help you prepare for a successful pitch that sets you apart from the competition that sends them generic outreach. The more you know your business — right down to its every metric and move — the easier it will be to find investors who align holistically and weed out those who don’t. Once you narrow your investor profile, ​here are some places to start your search: Angel networksAffinity groups (by race, industry, geography, ethnicity, veteran status, problem sets)Family officesHigh net worth individualsGovernment funding sourcesFoundation funding sourcesUniversities 3) Know Your Market Research With any luck, you’ll line up a few meetings. Ensure you know what you’re going to say when the moment arrives. Be able to anticipate — and answer — common questions from investors. That means having a thorough understanding of your industry and where your business stands against competitors. Ask yourself some of the following questions before meeting with potential investors: What is your unique selling proposition? Who is your customer? What obstacles, if any, stand in the way of achieving your vision? What is the business opportunity presented by your solution?  Credible answers to questions like this will help you distinguish yourself. Want more tips on sourcing prospects? Learn to find investors now. 4) Make a Compelling Sales Pitch At the end of the day, investors are interested in making themselves money. They might not care about your incredible product if they don’t see a path to profitability. To demonstrate this path, get your financials and internal data in order before pitching an investor.  Be prepared to share the following information: Profits year-to-dateMonthly revenue and expensesFuture financial forecasts Furthermore, it helps to provide information about your team expertise, as well as any metrics to prove the traction your business has today. Yes, sharing this information can feel revealing. But understand that investors want assurances that your business fundamentals are solid and there’s a clear path to profitability. Because remember: If your business can’t make money, it’s not a business. It’s a hobby! 5) Develop Quality Pitch Materials In all likelihood, you have a solid elevator pitch that’s enough to pique an investor’s interest. But what happens when they’re ready for a deeper conversation? Developing solid pitch materials ensures you can deliver relevant business information in a robust and concise format. These two types of materials are essential: Verbal Pitch This is your short elevator pitch meant to catch someone’s attention in five minutes or less. Your verbal pitch should be tailored to each person, but the heart of the pitch should be about selling yourself — why are you the person to invest in? Pitch Deck Develop a short and professional pitch deck, no more than 13 slides. Aim to communicate key messages such as your business model, vision, and proof of traction. At the same time, investors are busy! Edit this document to deliver only the essential information in the most efficient way possible. Have trusted colleagues review your materials before testing them in the field. Additionally, don’t be afraid to revise things along the way. 6) Pitch Investors and Refine Your Technique With Time As you start pitching investors, you’ll learn a whole new form of etiquette. For example, cold calls and cold emails are typically unwelcome. Peppering an investor with industry jargon or a long-winded pitch won’t get you far, either. Instead, focus on building a relationship with investors before asking for money. Network with an investor’s portfolio companies to get tips and perhaps an introduction.  Most of all, hone your pitch until it’s tight, snappy, and confident.  Finally, take notes directly after your meeting about what worked and what didn’t. If you hear no 10 times, there’s probably a mistake or gap in your business plan. Investors are smart people, so put their feedback to good use. We hope these tips to find small business investors help! Want more ways to refine your pitch? Learn to pitch investors now. For more small business tips and inspiration, create a free account on Hello Alice or subscribe to our weekly newsletter.
Jun 22, 2022 • 4 min read
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Small Business Funding

5 Small Business Financing Options to Scale Your Business

When it comes to starting a business, capital access becomes one major, if not the biggest, concern. In fact, most Hello Alice temp checks have found access to capital is the number one dilemma among small businesses, with 89% of small business owners claiming lack of capital access limits their businesses’ growth. So what small business financing options are there for fledgling operations with scant resources? What is Business Financing? First, what exactly do we mean when we say “business financing”? Simply put, it’s any sort of money an owner acquires from outside of sales to use in the support of their business — opening a credit card to pay for operation costs or taking out a loan to fund a marketing initiative, for example. Challenges in Small Business Financing Let’s be real: financing isn’t fair. Credit and bank lenders have a history of discrimination and credit scores themselves are often regarded as antiquated and biased measures of financial worthiness.  When Hello Alice polled small business owners, 50% had a personal credit score of 680 or better — strong enough to apply for most business credit cards — yet did not qualify for a business loan, which typically requires a score of 720 or better. On top of this, 49% of Black business owners who applied for financing in the last 12 months reported that none of their applications were approved. With all of these systemic factors working against small business owners, what options are there and how can we break through the barriers? Types of Small Business Financing While many types of funding options for small businesses exist, some are more reliable and attainable than others. At the start of 2022, 62% of small business owners planned to apply for financing, which includes: LoansCredit cardsLines of creditGrantsInvestors Keep reading to find out more about each type of financing small businesses can choose. 1. Loans If you’re in the market for a small-business bank loan, you’ll discover several types you can apply for, all with their own sets of qualification criteria. Some loan types include: Traditional term loanSecured loanSBA loanVehicle loan Commercial real estate loan Just remember, small business loans must be repaid and interest adds up. Be sure not to borrow a loan amount more than you need in order to avoid an excess of interest payments in the long run. To learn more about loans and what it takes to get one, check out our guides Secure a Bank Loan and Secure a Loan From a Nonprofit Microlender. For easily attainable loans, check out our Funding Center to explore options for your business. 2. Credit Cards Many early-stage entrepreneurs may not qualify for more traditional forms of startup capital — such as bank loans. In that case, business credit cards may be a good way to go. Just remember to use your credit responsibly and pay attention to added costs and high interest rates. Exploring rewards programs can set your business up to earn cashback or other benefits for standard business spending.  Dive into our Select the Right Credit Card guide to determine the right credit card option for you. 3. Line of Credit Although credit cards and lines of credit overlap, they’re not quite the same thing. While a credit cards provides direct access to a line of credit, not all lines of credit are associated with cards, i.e., all credit cards are lines of credit but not all lines of credit are credit cards. Often, the APR on a line of credit is lower than on a credit card, and lines of credit tend to have a higher credit limit. The downside? Lines of credit don’t have the same rewards programs as credit cards. Examples include: Home Equity Line of Credit (HELOC)Securities-Backed Line of Credit (SBLOC)Personal Lines of CreditDemand Lines of CreditBusiness Lines of Credit 4. Grants The closest you’ll get to free money, grants, depending on the type, require a service rendered or simply an application in exchange for capital. The only catch with grants? Locating them and determining eligibility.  But that effort is worth it: when Hello Alice polled small business grant recipients, 96% reported grants were “very or extremely helpful” to the viability of their businesses. And to make things a bit easier, Hello Alice tracks down grants for you. To explore grants and their application requirements, check out Hello Alice Grant Opportunities to see collated grant programs as well as Hello Alice partnership grants. 5. Investors Getting people to give you money sounds ideal, right? Just remember, when it comes to investor funding, it’s not quite free money. You’ll give up equity, or pieces of ownership, of your company in exchange for the investment funding you raise. Different types of investors are: angel investorsventure capitalpersonal investorspeer-to-peer lenders The various investors expect different details in the pitches they receive, as well as different amounts of equity and say in the operations of your business. To learn more about pitching investors, including how to do so without losing complete control of your small business, read through our guide in partnership with Silicon Valley Bank, Get Your Startup Ready to Fundraise. Final Thoughts Don’t let the different financing options overwhelm you. With a little research combined with a thorough knowledge of your business’ financial needs, you’ll be well on your way to gaining the capital your business needs to thrive. To read more about small business financing, check out the Small Business Funding section of the Hello Alice blog.
Jun 22, 2022 • 4 min read