Business funding varies from situation to situation. No matter you need to expand your staff, purchase new equipment, or handle other expenses, you need finances. Below you can find the most popular funding options for small businesses:
- Bank Loan
A bank loan is typically granted as an installment loan. This type of loan offers predictable repayment schedules that are easy to budget around. Qualifying for a bank loan can be challenging.
- Business Line of Credit
This is an unsecured line of credit. It isn’t secured by your personal assets. Online lenders will use data to help you immediately get access to the working capital you need.
- Credit Cards
Business and personal credit cards are easy to use and often easier to obtain as compared to traditional funding. However, high interest rates and low minimum payments can cause repayment to take decades.
For crowdfunding, you should create an online profile and explain why your business needs financing. As a result, you get investors involved through crowdfunding efforts. You don’t need to have a great credit score.
- Factoring Loan
You can leverage your accounts receivables and not your inventory to get working capital. Your stack of unpaid invoices can be turned over to a factoring company. The latter will give you a percentage of the invoice value upfront, remitting the rest of the funds (a factoring fee not included) when your invoices are paid.
- Home Equity Line of Credit
You can use a home equity line of credit instead of using your business assets as collateral. You can spend the capital the way you wish.
- Inventory Loan
If you’re running a retail or wholesale company, you can apply for an inventory loan. This type of loan is secured by your inventory.
Microloans are a type of small loans funded by the SBA (Small Business Administration) and administered through local lenders. A solid business plan and good credit scores will be required. For alternative small business loans, consider turning to firstamericanmerchant.com (FAM), a top-rated high risk processor.
- Peer Lending
Peer lending and crowdfunding have the same format. You should establish an online profile to explain why you need business funding. Then, peers will lend money directly to your business. For this type of funding, it isn’t mandatory to have good credit.
When using crowdfunding, sometimes businesses offer sample products to their early investors. This is known as preselling. This type of funding helps you get revenue before the product is made.
- Savings Account
A savings account is an interest-bearing deposit account maintained by a bank or another financial institution that provides a lower interest rate. This is ideal for those who have accounts full of funds to start their business.
If you want to get off the ground or need capital for an existing operation, you can use one of the small business funding options mentioned above. Choose what is right for your business and start growing.