Securing funding requires effort--first in knowing what kind of funding to seek, and second in actually securing it.

Funding for small businesses comes in various forms, each with different strings attached.  This article will help familiarize you with those strings.  You can then take that knowledge and seek after the funding that best suits your situation.

1.Loans

Loans given out by financial institutions like banks are good for those who cannot get someone to invest directly in the company.  The downside of a loan is interest.  So long as there is money to be paid on the principal, interest will come along with it.  Another downside to loans is the demand for collateral.

In order to protect themselves from loss, banks will stipulate collateral on the loan which could include valuable items like a boat, RV or home.  Should the loan recipient default on their payments, the bank can legally seize ownership of the collateral.

2.Investors

There are three main types of investors: friends and family, angel investors, and venture capitalists.

Friends and family differ from the rest in that they generally do not require equity in the business in return for their investment, i.e. they don't require ownership of the company.  Angel investors different from venture capitalists in that they are private investors as opposed to professional investors.  Angel investors also tend to be more patient in working with companies where as venture capitalists want quick returns on their investments.

3. Grants

Grants differ from loans and investors in that they provide "free money."  So long as one qualifies for a grant, and agrees to use the money for what it is intended, e.g. materials research, then there are no other strings attached.  No interest on the money and no ownership in the company.

While they are not the only options for funding, loans, investors and grants cover a broad range of funding sources.  Get to know how each source of funding works through further research, talking to those who have used it, and experience.   Experience will help you better understand what type of funding will best suit your business needs, though research will, hopefully, set you on the right path.