Business Lending Solutions When You Need Capital

When it comes to starting and running a business, a lack of capital is one of the most common problems entrepreneurs site. Most of them start with very little money, and what they do have usually comes from their own pockets (77 percent of business owners rely on their own personal savings).

You don’t need to have a ton of money to start a business. If you want it to grow and thrive, though, it helps if you have a decent amount of cash in your bank account. Often, this means relying on business lending solutions to give you a leg up.

Listed below are some of the best business loans you can utilize when you need capital for your company.

Business Term Loans

A business term loan is the most straightforward type of business loan one can get. It involves borrowing a certain sum of money from a lender, then repaying that money in installments with interest.

These loans are best for those who have ongoing capital needs, as well as those who have plans to invest their money in very specific areas of the business. They’re not ideal for those who just need occasional access to additional funds.

Lines of Credit

A line of credit gives you access to a certain amount of money that you can borrow against as needed. It provides your business with a bit of a cushion and gives you an emergency fund that you can dip into on occasion.

A business line of credit isn’t a good idea if you have an ongoing need for extra money. In these situations, you’d be better off with a term loan or other type of business loan.

Business Credit Cards

Don’t underestimate the benefits of a business credit card. For those who need access to additional cash flow every once in a while, a business credit card, like a business line of credit, can help.

This option can help you earn points and other rewards, and you may have access to special introductory interest rates. It’s still best for those who only need short-term financing, though.

SBA Loans

A popular loan among small business owners is an SBA (short for Small Business Administration) loan. These loans are backed by the Small Business Administration and are a good option for new business owners, especially those who have long-term capital needs.

Keep in mind that the process of qualifying for an SBA loan can be quite arduous. You have to jump through a lot of hoops before you can get the money you need, but the extra effort can be worth it.

Equipment Financing Loans

If you need additional funds so you can purchase equipment for your business, equipment financing loans are another good option to consider.

With an equipment financing loan, the loan is secured against the piece of equipment that you purchase. If you default on your loan, the lender will seize that equipment to make up for the lost funds.

Since they’re secured, these loans often have lower interest rates than many other types of business loans.

Microloans

As the name suggests, a microloan is a smaller-than-average business loan.

In most cases, microloans allow you to borrow around $50,000 or less. Most microloans come from nonprofit lenders, although the Small Business Administration also has its own microlending program.

If you don’t need a ton of money but could benefit from a small cash infusion, a microloan may be a good fit for you. Pass on it if you need more money than what this type of loan can provide, though.

Personal Loans

Some people don’t realize that you can use other types of loans besides business loans to fund your business. For example, you can take out a personal loan and use it to help with business expenses.

If your business is brand new and hasn’t built up a lot of credit, for example, you may be better off using your personal credit to help you get a personal loan.

There are some downsides to this approach, though. Your personal credit will take a hit if you can’t pay back the loan. Personal loans are also often available for much smaller amounts than business loans.

Peer-to-Peer Loans

Peer-to-peer lending allows you to bypass traditional banks and credit unions and borrow money directly from an individual.

There are lots of online platforms that simplify the peer-to-peer lending process and put you in contact with individuals who are looking to help out small businesses. These can be a good option for businesses that don’t have strong credit or have had a hard time securing funding from other sources.

Merchant Cash Advances

Merchant cash advances allow you to receive an advance on capital in exchange for the purchase of a portion of the sales you make from customers using credit or debit cards. You’ll pay back the advance with a percentage of these daily sales.

Merchant cash advances can be helpful if you don’t qualify for other types of loans. They’re also expensive, though, with APRs that can easily exceed 100 percent.

Accounts Receivable Loans

Finally, don’t forget about accounts receivable loans. These types of loans allow you to receive early payment on outstanding invoices. If you have clients who have not yet paid their invoices, this allows you access to the money you’re owed.

This type of funding can be beneficial in the short-term. Be sure to research interest rates before you decide to pursue it, though, as some accounts receivable companies can charge you a lot of additional money in interest (sometimes even more than the amount you’re borrowing).

Apply for These Business Lending Solutions Today

As you can see, there are lots of different business lending solutions out there that will help you get your hands on the funding you need.

Do you want to learn more about any of these types of business lending? Do you need additional help with funding your company?

If so, visit the Finance section of our site today. You’ll find tons of helpful resources there that will answer all of your business funding questions!