Capital is vital to any business, whether it’s just getting started or looking to grow. How you fund your business can have a huge impact on your operations and ability to take advantage of new opportunities.
The good news is that there are many choices for business owners seeking funding today. The type of funding that’s right for your small business depends on several factors, including what you need the money for, what type of credit or business history you have, and your willingness to take on debt.
In general terms, there are three primary sources of funding: self-funding, investors, and loans. Each has its pros and cons. With self-funding, business owners tap their own financial resources, i.e., personal savings and retirement accounts, and may ask for help from family and friends. This option allows owners to maintain full control over their businesses. However, it may be difficult to raise enough money to keep the business growing with these limited sources. In addition, if the business doesn’t succeed, the owner may be left without a financial cushion.
Some businesses, especially those that promise high-growth opportunities, may be able to attract outside investors. This option can allow for the fastest accumulation of needed capital. But it comes with a downside, namely that the owner often must give up some control of the business by allowing investors to have a say in operations and major financial decisions.
Many owners apply for loans to fund their businesses. With a loan, you can keep control of your business without giving up hard-earned savings or retirement funds. There are many types of loans available for small business owners, so pinpointing the best option for your unique circumstances is important.
Huntington has helped many small business owners identify funding options for their businesses. One of these options is called Lift Local Business, which Huntington launched in 2020 to support minority-, women- and veteran-owned small businesses as well as businesses located in a low- or moderate-income census tract.
Lift Local Business was designed to support small businesses throughout the business life cycle — from start-up to expansion. The program offers loans, business planning support and other services to help small business owners achieve their goals. The educational component of Lift Local is delivered through Operation HOPE, a nonprofit organization working to equip people with financial tools and education to secure a financial independence. Operation Hope offers Lift Local borrowers an online self-guided course, that allows business owners to work at their own pace to build a business plan and financial projections.
Under the Lift Local program, businesses can secure SBA-guaranteed loans from $1,000 to $150,000. The Huntington Lift Local Business features include:
- Zero origination fees
- SBA fees paid by Huntington
- Lower credit score requirements
- Free financial education courses delivered in partnership with Operation HOPE
- Checking accounts with 24-Hour Grace® overdraft fee relief, and service fee waived for 36 months
- Flexible, longer-term repayment options.
Since launching the Lift Local Business program in October 2020, Huntington has provided $28 million in loans to nearly 400 minority-, women- and veteran-owned small businesses. Of that total, 23 small businesses in West Michigan received Lift Local loans totaling $1.7 million.
Lift Local Business is a key component of Huntington’s $40 Billion Strategic Community Plan, which focuses on driving economic inclusion through access to capital, affordable housing and homeownership, and community lending and investment. With the 2021 Strategic Community Plan announced in June 2021, Huntington increased the Lift Local Business program investment from $25 million (first announced in 2020) to $100 million over the next five years.
When it comes to funding your business, exploring all your options is key to finding the best funding sources for your business operating needs – whether starting up or planning to grow. Given the available options, you can take steps to secure the capital you need to help your business thrive.
Learn more about the many ways Huntington is helping to support local, diverse businesses at www.huntington.com/liftlocal.
