How To Leverage Financing Today To Grow Your Business Tomorrow
Capital can be the difference between growth and fizzling out.
- July 10, 2020
- 3 min read
You're our first priority. Every time.
We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Bottom line? We’re on your side, even if it means we don’t make a cent.
If you’re in a position to expand your business or you’re just thinking ahead towards the future, you’ll most likely need to financing to accomplish this goal. To acquire funding, some entrepreneurs use crowdfunding sources like Kickstarter and Indiegogo or turn to family and friends for cash. At one point or another, nearly all new business owners use financing. And if that’s your chosen route, you have a plethora of options to consider. In fact, you have so many options that due diligence becomes a necessity.
“Getting a business loan sounds simple—until you realize how many types of loans exist and how many lenders offer those loans,” Chloe Gawrynch wrote in a business.org article. “Suddenly, you find yourself overwhelmed by choices that you didn’t even know existed.”
The first thing to do is to figure out what you’ll use the money for. It’s not enough to say, “I’ll use this money to grow my business.” You need to create a solid plan that outlines exactly where you’ll spend the money. This technique will help you narrow down your options so you can find the ideal loan.
It’s also critical you consider timelines. When will you need the money to hit your account? How long would you like to have to pay the money back? Answering those two questions can help expedite your decision.
Most small business owners use one of the following financing products to grow their business. Check out descriptions of each of these popular borrowing options, listed in no particular order, to figure out which one might be right for you. Then, contact Seek Capital today to get started.
With a business line of credit, you can get between $1,000 and $500,000. It’s a revolving form of financing, so you get ongoing access, rather than a lump sum deposited in your account. The money becomes available in a week or so. Expect the interest rates to vary from 8 to 24 percent.
Financing from the Small Business Administration is an extremely popular option. You can get up to $5,000,000 for your business, though the money will take as long as three months to arrive. Popular types of SBA loans include the SBA 7(a) Loan, SBA 504 Loan and SBA Express Loan.
When you need money fast, a short-term loan can be a great solution. They only go up to $500,000, but you can get that money the day after you’re approved. The interest rates start in the neighborhood of 8 percent.
This kind of financing allows you to borrow against future earnings to obtain the money you need today. You can expect the amounts to top out at around $200,000, with the money becoming available within two days. The interest rates are often on the higher side, starting at 18 percent.
This type of financing is tried and true and useful for just about any business need. You can obtain up to $2,000,000, with the loan funding in two to three days. Plus, interest rates start as low as 6 percent.
If you have a personal credit card, you already understand how a business credit card works. This financing method provides access to up to $500,000 with the money becoming available in about a week. The interest rates vary substantially, usually falling in the range of 8 to 24 percent.
Related: How to Get a Business Credit Card
You can use this type of loan to meet your equipment needs as you grow your business. The amounts can reach $5,000,000 with those funds arriving in 24 hours. The rates are also quite desirable, starting around 7.5 percent.
If your business is growing, you may have property needs. That’s where a commercial mortgage can be useful. They range from $250,000 to $5,000,000 and often have interest rates as low as 4.25 percent.
Sometimes referred to as factoring, accounts receivable financing can provide you with funding worth up to 80 percent of your receivables. You can access the money in just a few days, and the factor rates start around 5 percent.
For entrepreneurs whose growth plans involve acquiring other businesses, a business acquisition loan can be a good fit. The amounts top out around $5,000,000, and the interest rates start around 5.5 percent. One thing to note is the money can take up to a month to arrive.
If you have desires to grow your business, now is an excellent time to create a plan and put it into action. The economy is in great shape, retail sales are solid, and there’s enough entrepreneurial optimism out there to help your goals become a reality.
It’s important to remember that you always have financing options. If a certain loan product doesn’t seem like a good fit, don’t worry. Your ideal funding source is out there.
More From Seek
- 5 Smart Ways to Stay on Top of Loan Payments
- 4 Signs It’s Time to Get a Business Line of Credit
- How to Safeguard Your Business for the Recession
Business Loan Resources
Photo credit: Odua Images/Shutterstock.com
Best Startup Loans of 2020 - Get Between $5,000 and $500,000
Get more great articles straight to your inbox!
Let us make it up to you with better articles straight to your inbox.
Recommended For You
QuickBooks is a versatile and flexible software that allows you to accomplish most major accounting tasks whether you have lots of experience or are a first-time business owner doing everything yourself. However, some of QuickBooks’s tutorials can be a bit... Read More
- May 18, 2021
- 6 min read
If you find yourself in a situation where you need cash fast, but your credit is less than stellar, you will be happy to know that you still have options in the lending world. Thankfully there are certain lenders who... Read More
- March 29, 2021
- 6 min read
Have you been considering if you should apply for a personal loan? If so, you’re not alone. Borrowing money can be confusing and overwhelming at times. A lot of people wonder where to begin or if their credit score will... Read More
- March 28, 2021
- 6 min read