The Different Types of Small Business Financing That Exist Today

Financing is the lifeline of any small business. A small business with good capital and cash flow is more likely to thrive and grow when compared to a cash-strapped business.

With 29% of small businesses failing due to lack of capital and cash flow, finding viable financial assistance for your business is paramount.

While big banks won’t always favor small businesses, there are several small business financing options available.

These other financial channels offer much-needed relief to many businesses that may not be doing so well.

Types of Small Business Financing Options

There are various types of financing options available for small businesses. Knowing the best choice for your business is critical.

Read on and find out.

SBA Loans

Helping small businesses in need is the core purpose as to why the Small Business Administration (SBA) exists.

As the SBA doesn’t make loans, it guarantees a portion of the loan, thus lowering the risks to the lenders. This dramatically improves the likelihood of the participating lenders approving the loan requests.

There are several types of SBA loans available for small businesses. The qualifications and loan terms vary depending on the loan type.

SBA 7(a) Loan

By far the most popular SBA loan as it can be used for all types of purposes. It’s available for up to $5 million if you meet the qualifications.

SBA 504 Loan

If you want to fund a project, this is the loan to go for. However, qualifications are limited to businesses with a net worth of less than $15 million.

SBA Microloans

These are loans of up to $50,000 to help small businesses start-up or expand. Loan terms vary between individuals and SBA approved lenders make the credit decisions.

Business Line of Credit

Like a credit card, a business line of credit offers flexibility, and it has a set limit that you’ll borrow against. You can borrow again after you repay.

One of the advantages of this type of loan is that it allows small business owners to borrow what they need. The rates vary depending on the business credit score.

Short Term Loans

This type of loan offers your business a way to support temporary capital needs. The qualifications for these loans aren’t too strict. With a healthy credit score and who have been in operations for quite some time, you’re good to go.

These loans are easy to process, and if they get approved, you can get them within 24 hours.

Many small business owners use this type of loan when they need an urgent solution for time-sensitive issues.

Equipment Financing

Equipment financing is your go-to loan when your business equipment breaks down, and repairing them isn’t an option.

This type of loan allows you to acquire all sorts of equipment that your business requires. The equipment can be used as security, or it can be a lease to own term.

For more information on equipment financing, please get in touch with

Grow Your Business With Small Business Financing

With this small business financing guide, you can make an informed decision on which small business loans will work for you. This will help grow your business to the next level.

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