Small business loans have grown increasingly complex with a variety of financing options for every kind of borrower.
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From quick short term funding to equipment financing, LendGenius is here to help connect you with a lender.
See Loan OptionsSetting out on a new venture? For borrowers with strong credit and collateral to pledge, startup business financing options are available in the form of equipment underwriting, credit line builders, personal financing, non-profit microlending, credit cards, and SBA funding.
Not unlike a credit card, a line of credit can be used for just about any business expense you can think of. A business LOC gives you the same quick access to revolving credit, but often with fewer fees, lower interest rates, and favorable repayment terms than you’d see with a generic credit card.
These options include any funding that is required to be fully repaid within 2 years. For example, accounts receivable financing and merchant cash advances fall under this category because they’re only meant to be used as a temporary cash flow fix.
These are the most common forms of small business financing. They are often used to finance expansions or other long-term growth activities, so they have higher funding amounts with fixed payments spread out over an extended period of up to 5 years.
This option allows you to start using the revenue-generating equipment you need immediately and pay it off over its estimated operating life. With the machine serving as collateral, the lender’s perceived risk is lower which means you can expect a better rate than you might get with other options.
A merchant cash advance could be all that stands between you and your next big move. A unique and flexible funding option, MCAs can get you the lump sum of cash you need without overextending your budget. Your payments will fluctuate along with your credit card sales volume, so you won’t have to worry about a high payment during a bad period or seasonal fluctuations.
Invoice financing, also known as accounts receivable financing, is a way for you to get access to the money you’re owed from slow and overdue customers. You’ll have to take a hit on the factoring fee, but you can have funds in your bank account within 24 hours.
The SBA provides low-interest financing via intermediary lenders. If approved, the Small Business Administration guarantees repayment in the event you default. Since the lender assumes less risk, he or she is also willing to grant more favorable terms. There are a number of programs for a variety of different situations, but they may impose limitations on how your funds are used.
Your financial advisor might tell you that mixing company finances with your personal credit is a risky move - but a little risk never stopped the determined entrepreneur. Using this option to fund your venture is a legitimate option, but it may complicate your accounting. On the plus side, this option may be a faster and easier way to fund a startup due to a relatively simple underwriting process.
The right small business credit card can help you effortlessly streamline your finances and operations. Use credit cards to build credit history, keep business expenses separate from your personal accounts, and to grow your company with ease. Of course, the best business credit cards and the most competitive rates are granted to business owners with strong credit scores. If that’s not you, consider a card with no annual fee that you pay off in full each month to start earning rewards on the necessary expenses you have to pay anyway.
Working capital is considered a form of short term financing because it normally requires full repayment in 2 years or less. Thus, it shouldn’t be thought of as a solution to chronic cash flow issues. Instead, you should use working capital towards improvements that will help you generate additional revenue in the short term, such as upgrading your tools, launching a marketing campaign, or hiring for a key role.
Perhaps you want to eliminate a competitor, buy a partner out, or maybe just take over your neighborhood corner store. In either case, you’ll want to look at business acquisition financing options to make the transition as smooth as possible.