Financing Options for Small Business

If you’re looking to expand your business or searching for additional funds to get through your slow season, there are various options you might be considering. There might be others you didn’t even know existed.

As a small business owner, it’s helpful to understand the options available to you.  Here are a few you might be considering:

 Bootstrapping – Invest your own money into your growth. Bet on yourself.

 Friends & Family – Solicit friends and family to invest or loan you money. Consider the relational impacts before you go this route!

 Merchant Advances – Merchant advances are short-term financing options that are offered through your payment processor or point-of-sale system. These can be costly, so make sure you know what you’re getting before you sign up (see more here).

 Bank Loans – Traditional bank loans are great options if you’re profitable and have been in business for more than 2 years (you might still qualify as a new business, but it’s more difficult with a traditional loan). 

 SBA Loans – SBA loans can be good options for newer businesses that don’t qualify for traditional bank loans. The loan costs are often higher. 

 Micro Loans – Some banks, financing companies, community programs, and government agencies offer micro loan programs. These are very small loans that are given to help businesses that can’t qualify for traditional financing. Often there are additional funds available to recipients after they pay the initial loan off. 

 Grant Programs – While grants are not often available to for-profit businesses, there are some programs out there for specific industries, certain geographical regions, and some start-ups. 

 Equity Investors – While not traditional financing, you might consider bringing on an investor for growth capital. This would be money that you don’t have to pay back. However, if you go this route, you bring on a partner (or partners) in the process. That’s a whole new ball game! 

 Weigh all your options when you’re considering growth capital for your business.

 Know the costs.

 Understand the risks.