13 Best Loan and Grant Options for Starting a New Business in Florida
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It is essential to know precisely the kind of loan you need and the pros and cons of each financing option to avoid your loan application getting rejected. In addition, there are many business grants in Florida that your business may benefit from, so it is prudent to research those that fit your needs.
Top Best Loan and Grant Options for Starting a New Business in Florida
Florida High Tech Corridor Grant
The grant is available for tech companies keen on research funding. The amount of award ranges between $10,000 – $150,000.
Enterprise Florida Grants
Enterprise Florida grants are suitable for small businesses in need of venture capital and partnerships. It also offers State Small Business Credit Initiative (SSBCI) that matches business start-ups with financing opportunities such as venture capital programs.
USDA Rural Business Development Grants
USDA is available to small businesses in rural areas with less than 50 employees and annual gross revenue not exceeding $1 Million.
Small Business Research Grants
The grants are suitable for technology or biotech start-ups that require funding for research. There are two grant programs: Small business innovation Research (SBIR) and Small Business Technology Transfer (SBTT). The two partners with the US government in funding start-ups in the technology sector.
Federal Minority Business Grants
Federal minority grants are available to minorities who own small businesses. Minority parameters include ethnicity, gender, or disability. US government sets aside $1 Million grants every year to fund businesses for minorities across the country.
FedEx Small Business Grant Contest
FedEx grant is available to small businesses who locally beneficial services and products. In addition, FedEx funds businesses with innovative ideas that raise the standards of local communities.
Small Business Administration (SBA) loans are government-backed financing options with favorable terms and interest rates. Your score should be 600+, and you can get a loan of up to $350,000 repayable within ten years.
Equity financing involves raising funds through an investor who will become a co-owner and share in the business’s profits. The arrangement is through angel investors and venture capital/ private equity investors.
Angel Investors: Here, a high net worth individual injects business funds in exchange for part ownership. The individual fund your new business venture through personal funds in exchange for convertible debt. Your investor comes in with attractive capital through flexible agreements. However, it can be costly as they take up a share of the business.
Venture Capitalist/ Private Equity: Venture capitalists pool resources from multiple sources to fund start-ups having a great idea or vision. Venture capitalists differ from Angel investors because they are a corporation, whereas Angel investors are individuals. In this case, you can obtain more significant amounts of capital.
Business crowdfunding operates through a collective effort of friends, relatives, investors, customers, and acquaintances who raise money as capital for your business. Such collaborative efforts include peer-to-peer lending, donations, rewards, and equity from your networks.
However, its downside comes in the form of delays in achieving target funds.
Debt Financing Borrowings
Banks and NBFCs (Non-Banking Financial Companies) provide loans to purchase inventory and equipment, working capital, and expansion. Getting loans at the bank is advantageous because banks are stable institutions and have no chance for failure.
However, their loan process is slow and tedious because of bureaucratic procedures and low approvals for small business loans.
Online lenders offer fast, simple, and attractive business loans tailor-made for small businesses. These unsecured loans have high approval rates. However, these loans come with variable interest rates that create uncertainty.
External Commercial borrowings (ECB)
External commercial borrowings are lenders not resident in the state and provide bank loans, instruments, and buyer or supplier credit.
Starting a business needs proper planning to ensure you have all the resources to propel it forward. New businesses struggle the first year and demand funds for promotion and advertisements.
Fortunately, there exist the best loan and grant options for starting a new business in Florida to aid your business’s financial needs. Your financing options depend on your industry, the purpose of the funds, and the urgency of the loan.