As a small business, sometimes getting funding is not always easy. There are many factors to consider, like credit scores, years in business, and how much money you currently have. Lenders may not loan to small businesses that have not been in business a long time or have less-than-perfect credit scores. However, many types of funding exist that entrepreneurs can try if they need some way to fund their venture. Here are some loans you should consider if you need small business funding.
SBA loans are well-known government loans for small businesses. Since they are the Small Business Administration, they have a few loans business owners can apply for and finance their company. 7(a) loans have a maximum amount of five million dollars and can be used to buy furniture and supplies, refinance debt, and for working capital. You can use a 504 loan to purchase machinery, real estate, or other equipment.
Microloans have a cap of $50,000 and can help business owners start or expand. These are all great options for small business funding. To ensure you get approved, read over the terms and requirements for each loan.
Lines of Credit
A business line of credit is a flexible way to borrow money. It does not require as rigorous of an application process as other loans. You can get finances up to a credit limit, and you only pay interest on the money used. However, remember that this type of small business funding can have additional costs, and you need strong credit.
Merchant Cash Advances
Merchant cash advances are a quick way to get money for your business. This type of loan is a bit different from other loans. You do not have to make a fixed payment each month. Instead, this loan requires a percentage of your daily credit card sales as repayment. However, this loan type comes with high borrowing costs.
Business Credit Cards
If you have to travel for your business often or need office supplies, a business credit card may be correct for your needs. The card has a certain amount of money you can use, and you make monthly payments on the card. You can earn rewards on purchases, and you do not need collateral.
Funding your small business does not have to be challenging. Even if one type of loan does not work, there are several others to apply for instead. Research to see what loan is best for your business.