5 Creative Ways Small Businesses Can Raise Funds for ERP Software

Financing Options to Fund Your ERP Software System

As a small business, investing in an Enterprise Resource Planning (ERP) software system is a game changer. Harnessing the power of data, automation, and business intelligence helps you increase revenue, lower costs, and improve operational efficiency. Funding the purchase of an ERP system, however, can be challenging. With that in mind, here are five practical ways to help you raise the necessary funds for your inventory management technology:

Small Business Administration (SBA) Loans

The SBA offers numerous loan programs, such as the 7(a) Loan Program and the 504 Loan Program, which can be used for purchasing software and equipment, including ERP technology.

Grants & Subsidies

Many state, local, and federal government agencies offer grants for technology upgrades, especially for small businesses. A good place to start your research is on websites like Grants.gov, USA.gov, and GrantStation.com.

Local Economic Development (LED) programs are another funding source with regional government and economic development agencies. Examples include:

• Rural Economic Development Loan & Grant Programs: Provides funding for rural projects through local utility organizations, with the USDA providing zero-interest loans to local utilities, which in turn pass them on to local businesses.
• Economic Development Administration (EDA) Programs: The EDA offers various programs to support economic development, including grants to economically distressed communities to generate new employment and stimulate industrial and commercial growth.
• Community Economic Development (CED): A federal grant program that invests in community development corporations (CDCs) to create and expand businesses and job opportunities, especially for low-income individuals.

Microfinance Loans

Microfinance Institutions provide specialized loans to qualified small businesses. Their programs target companies that lack access to conventional banking. In fact, some community-focused organizations offer microloans specifically for technology upgrades like ERP systems.

Other Types of Grants Include:

• Private grants: Nonprofit organizations and enterprise corporations, such as Amazon, FedEx and others, offer grants to small businesses.
• Manufacturing Extension Partnership (MEP): The National Institute of Standards and Technology provides MEP grants to help small business manufacturers implement technology upgrades, including ERP systems.

Financial Services Technology Companies

Some fintech companies, such as Lendica, provide debt-based capital that can be used to purchase technology like an ERP system. You will need to meet minimum requirements to receive their funds, such as revenue levels or accounts receivable, but the hurdles aren’t typically too difficult in order to receive the capital.

Reallocate Internal Resources

For companies that prefer not to take a debt-based approach, bootstrapping or reallocation of resources is also a solution. Take a close look at your current expenditures and identify areas where you can cut costs or renegotiate with vendors. For leaders that prefer a more gradual approach, allocate a portion of your monthly, quarterly, or annual profits towards the ERP system instead of distributing them for other purposes.

Lastly, consider implementing ERP in phases, allowing you to spread the costs over time while still benefiting from an “out of the box” system. Ascent Solutions provides a Guided Start Implementation on Salesforce that enables startups and small businesses to get up and running quickly, using a phased approach.

To wrap up, raising funds for an ERP software system doesn’t have to be daunting.

By exploring these creative funding options, you can find the resources needed to invest in an ERP solution that will streamline your operations and drive growth. For a complete list of all of the resources mentioned in this article, contact us for more information.