Cash at Hand: Credit and Loan Options for Your Growing Small Business

Cash at Hand: Credit and Loan Options for Your Growing Small Business

A growing business is a good thing—but it’s not without unique challenges. One issue small business owners face is financing that push to the next stage, whether it’s equipment upgrades or cash to meet payroll for new hires. But no matter what your growing business needs, there are credit options that can help you close the gap between where you are and where you want to be.

Let’s have a look at some savvy lending solutions that can help you grow your small business—today and tomorrow.

Business lines of credit

Would you like to have the security of knowing there’s cash available for your business whenever the need arises? If so, a business line of credit may be an ideal solution. Lines of credit are typically available as both secured (backed by collateral owned by your business and a guarantor required), and unsecured (no collateral and a guarantor required).

The amount available through your line of credit will be determined by an underwriting process, but drawing funds can be as simple as writing a check, making an online transfer, or calling your business banker.

Ideal for: short-term cash needs, purchasing inventory, improving overall liquidity

Business credit cards

There’s not a small business owner who hasn’t ponied up their personal credit card in order to make a business purchase. Why not free up your personal credit, and let your business build its own credit instead? Business credit cards allow you to make everyday purchases—from office supplies to airline tickets—while keeping your personal credit personal. Many business credit cards also offer awards or point-related programs that reward you for purchases.

Ideal for: day-to-day business purchases, business-related travel, filling inventory gaps, unexpected purchases

Business term loans

Many growing businesses realize they may need additional equipment, upgrades, or even more working capital to fund long-term expenses. This is where a business term loan can come in handy. They allow your business to borrow a set amount and have fixed installment payments over a set term for repaying the loan. These loans are typically available as either secured or unsecured, and with terms up to five or ten years — depending on your business industry and use of loan proceeds. Business term loans can also be used for build-outs for commercial rental space to be developed.

Ideal for: infusing working capital into a company, capital equipment purchases

Small Business Administration (SBA) loans

An SBA loan is partially guaranteed by the federal government. This means these loans offer features that are not typically available with other types of small business credit options. SBA loans generally have longer terms than many other small business loans, as well as more lenient collateral requirements.

If you’re considering applying for an SBA loan to meet the growth needs of your business, meet with a business banker who’s skilled at guiding small business owners through the SBA loan application process. While it’s not without hoops to jump through, an SBA loan could be the infusion of cash your business needs to succeed.

Ideal for: purchasing business real estate (some limitations may apply), construction or expansion, capital equipment purchases, working capital, debt refinancing

Disclosure: All loans are subject to eligibility, underwriting and collateral requirements and approval, including credit approval.

Erika Napoletano

About the Author

@ErikaNapo

When you want your audience to listen, you have to give them a reason. Erika’s been finding and writing those reasons since 2007.

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