Where's the Money? Tips & Tools for Finding Funding in Northeast Ohio for Startup or Growth

Finding funding for a small business idea is a common and often frustrating experience for small business founders, owners, and operators. But, it is also an essential business skill to be learned and exercised often during the life of a business. Many small business startups either bootstrap themselves or use 'friends & family' financing. Yet many of us don't have a Daddy Warbucks for an uncle but do have a credit score that might not be so good for traditional lenders (below 650 for SBA loan underwriting). Read  'How Entrepreneurs Finance Their Startups'. 

Where to Start?  Develop a Written Plan with Score

Focus your passion, time, & elbow grease on developing a Business Plan for your idea. All funders, lenders, investors, [even grantors] want to see a written and credible Business Plan to see how the funds will be used and how the business is expected to generate sufficient cash flow to pay them back. Score can help you develop a plan with free mentoring and resources such as the Startup Roadmap and Simple Steps Workbook. A Score mentor can review your plan, suggest improvements, help you figure out your "MVO" minimum viable offering & resulting capital requirement, help you determine whether bootstrapping might be feasible, identify possible pitfalls, help you plan for use of free resources such as a GoogleMyBusiness web profile, and help guide you to potential funding sources and alternatives.

Have Business Plan, Now What?

Finding Funding is like Selling (another essential but learnable business skill) - expect a lot of "No's". But persist is what successful small business entrepreneurs do. Be sure to take Chapter 5 "Finding Funding" in the Startup Roadmap to learn more. Also read, our article Where's the Money? 

Tools & Tips on Building an Equity Stash or "Seed Capital" 

If you've decided you are unable to bootstrap, you will probably need 15-20% equity  (aka "skin in the game") to obtain further funding, so consider the following:

• Google Search 'grants for for-profit startups' - they come and go and often get quickly oversubscribed: so set up a Google Search Alert for business grants and be ready to pounce and apply
  • Here's some to research and subscribe to: Local Initiatives Support Corporation - LISC.org, nav.com's Small Business Grant Competition, VISA Card Everywhere Initiative, FedEx Small Business Grant Contest, Women'sNet Amber Grant, etc
  • Also see a recent Score recorded webinar on Finding Small Business Grants
• Consider signing up for a Pitch Competition that has $$$ awards; examples include
  • Cleveland Urban League's Annual Pitch Competition,  Cleveland Leadership Center's Accelerate , Women's Founder Fast Pitch, etc
  • If your venture will create jobs in the City of Cleveland, consider the JumpStart Impact program competition for $$$
• Research availability of local, state, federal government grants, for example
  • City of Cleveland Incentives & Financing
  • Federal Government's grant.gov
  • etc
• Consider and research crowd-funding services such as
  • GoFundMe [donation based]
  • KickStarter [product/services offering based]
  • IndieGoGo, etc
• Also search the Score Library and Google Search for more specific resources, such as Webinar: How to Find and Get a Small Business Grant  Other examples include
  • Veterans: https://www.score.org/blog/best-funding-sources-veteran-entrepreneurs

Tools & Tips on Traditional Bank Financing

Banks, even if they are an SBA authorized lender, look for several years of business cash flow returns, a decent credit score, and, sometimes, additional personal assets to secure a loan.

• It is helpful to establish business credit history for your startup - here's helpful hints on how to do so from our national partner nav.com
• If your accounting system has been a shoebox with random receipts and/or you've been paying business expenses from your wallet, personal checking or credit card account, take the time to organize your receipts into a spreadsheet, Quicken Home & Business, QuickBooks, or similar tool
• If you are not sure about your credit score, sign up for a free account at nav.com, a SCORE National Sponsor, or a similar free service
• If your FICO score is not so strong (below 650),
  • Consider taking a local webinar on credit repair, examples include
    • Cleveland's JumpStart recent webinar 
    • SBDC at Urban League recent webinar
    • If you are located in the City of Cleveland, see the Community Financial Centers services
    • Also see Experian's Blog article on Improving Your Credit Score
  • AARP recommends it is best to work with Credit Counseling providers that are 501C3’s which include affiliates of
    • National Foundation for Credit Counseling
    • Financial Counseling Association of America
• Applying for traditional bank financing
  • SBA loans are available through many traditional banks - find one or more using SBA's Lender Match tool 
    • Internet-based financial services providers can also help you find SBA lenders, eg. nav.com
  • Small community lenders and CDFI's (Community Development Financial Institutions) are sometimes more flexible;
    • Cleveland's ECDI is one such SBA micro-lender; find other CDFI's here https://ofn.org/cdfi-locator
  • See a local lender participating in the SBA Community Advantage pilot program: Growth Capital at https://growthcapitalcorp.com/programs/community-advantage/
• If you get a "No" - here are common reasons, and why you might want to "think positive" & develop a "Plan B" 

Tools & Tips on Non-Bank Financing

Banks & SBA have not been the only players in small business financing.

• Check out the new Northeast Ohio Business Growth Compass funding search tool for each NEO county, built by The Greater Cleveland Growth Partnership / COSE
• Here are some more non-traditional financing alternatives (varies by county, state, and region)
  • Northeast Ohio's HFLA (formerly Hebrew Free Loan Association, since 1904) at https://interestfree.org/
  • Cleveland Urban League's UBIZ small business loans at https://apply.tothrive.com/ubiz ; also see Urban League's Get Bankable program at https://www.ubiz.biz/programs
  • Cleveland office of National Development Council - NDC, see https://ndconline.org/small-business-lending/
  • City of Cleveland Neighborhood Retail Assistance Program at https://makeitincleveland.org/incentives/neighborhood-retail-assistance-program
• Google Search for one of many internet-based small business lenders, examples include PayPal, LendingTree, Ondeck, etc
• Consider new, innovative funding providers such as Honeycomb https://www.honeycomb.net/ and others which crowdsource investors
• If your startup requires equipment, suppliers sometimes provide financing secured by the equipment, similar to a car dealer providing auto purchase/lease financing
  • For more specialized fixed asset related lending, consider the offerings of local provider Growth Capital at https://growthcapitalcorp.com/programs/

If your entity is a 501C3 Non-Profit

A 501C3 Non-Profit can solicit foundation grants and tax-deductible donations 

• Consider using grant-writing training and resources at our Northeast Ohio partner, Candid - see https://search.candid.org/#/search/grantwriting/3
• Evaluate using GrantWatch or similar service to find availability of grants for your non-profit, see https://www.grantwatch.com/
• Consider applying for a non-profit grant from the Cleveland Foundation at https://www.clevelandfoundation.org/grants/apply-for-a-grant/​ or other local foundations in your community, eg
• Enroll your 501C3 at TechSoup https://www.techsoup.org/​ for webinars, newsletter, and discounts for non-profits on tools & services such as GrantStation, DonorPerfect, Stewardship, etc, with online donation & payment solutions