Chapter 3: Business Financing
Most businesses need outside sources of financing to become established or to expand. With ample options available, DC has many banking, financial, and community resources that can help a business thrive.
THERE ARE MANY WAYS to finance your small business, and you should consider the implications of each for your particular growth strategy. Funding options include:
- Obtaining a traditional bank loan
- Working with a lender to get a loan guarantee from the U.S. Small
- Business Administration
- Securing funds from an angel investor, venture capital firm or small business investment company
- Obtaining a loan from an alternative, community lender
Some of the best resources when evaluating funding opportunities are the DC Department of Insurance, Securities and Banking (DISB) as well as the U.S. Small Business Administration (SBA).
DISB promotes the availability of capital for small businesses by administering several small business financing programs, DISB’s Business Capital Programs (DC BizCAP). These include the DC Collateral Support, Loan Participation, and Innovation Finance Programs in partnership with local lending institutions. Visit their website at disb.dc.gov/smallbusinfo for more information. In addition, DISB’s regulation of the “District of Columbia-Only Securities Offerings Exemption” facilitates crowdfunding-type investments for DC small businesses. For more information, visit disb.dc.gov/crowdfunding.
SBA can help facilitate a loan for you with a third party lender, guarantee a bond, or help you find venture capital. SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds, and equity financing.