Not every education service provider (ESP) will need outside funding to launch or operate their business. Here are some options to consider if you do.
Business loans at a traditional bank or credit union can provide ESPs the cash they need to grow. These require a good credit score (700+), revenue reports, time in business (two years is the standard), and come with competitive interest payments. Business loans with a local bank are especially worthwhile options because you’ll benefit later from the rapport you build with your bank. Opening up and paying off your business credit card will build credit with your bank that’ll come in handy later. Credit unions and community banks report higher acceptance rates than large banks like Bank of America, JP Morgan Chase, or Wells Fargo, but are increasingly rare and can’t offer the same rewards and services their competitors do.
Online lenders, microlenders, and personal loans can work, but they come at a cost. Before entertaining high-interest loans with lower standards than traditional business loans, look into U.S. Small Business Administration loans — often referred to as SBA loans or 7(a) loans. SBA loans have comparable interest rates and terms to traditional business loans, often come with counseling and education, and lower down payments and collateral requirements.
Grants can really make a difference for a small business, but it can be laborious to secure one. Grants don’t require repayment or interest payments, so the governments, companies, and nonprofits that distribute them want to see their money affects society in a positive way and/or influences businesses to operate differently. Finding a grant that’s right for you is a journey on its own — grants can be extremely niche or broad (therefore competitive). Grants of either variety can be timely or ongoing. Therefore, if you do want to find a grant, you’ll need to make searching for grants a biweekly or monthly part of your workflow. For government grants, search Grants.gov, and for local private grants, competitions and other entrepreneurial help, West Virginia Chamber of Commerce may point you in the right direction. If you’re launching a microschool — please check out the Vela Fund! They’re easy to apply to and many West Virginia microschools have received grants from them.
Searching for funding and taking on liabilities requires some patience and thoughtful work, let us help you. Send us a message, leave a comment below, or request a free, half-hour consultation with one of our Innovation Hub Experts. We are here to help!