A Complete Guide To Small Business Financing
Whether your business needs:
- Financing to grow or expand its physical operations or footprint
- To invest in new equipment, technology or additional product or service offerings
- To simply ensure there’s a financial safety net in place in case of cash flow constraints that will make it difficult to pay employees, landlords or vendors, small businesses
They can benefit from securing financing to support their operations. We have put together a complete guide to small business financing to help!
How Can Financing Help?
In fact a recent study revealed that nearly 75 percent of small businesses have used some form of financing in the last 12 months. While the world of small business financing was once dominated by traditional financial institutions — accessible to small businesses that had an established credit history and positive credit score, had been in business for a minimum number of years, and generated a specific amount of revenue — small businesses of all shapes, sizes and ages now have plenty of choices when it comes to how they finance their businesses, and which providers they decide to partner with to access working capital.
In fact, because the small business financing space has grown to include alternative small business financiers — many of which leverage an online business model in order to provide startups, mom-and-pop shops and established small businesses with flexible financing options — it’s easier than ever for a small business owner to secure a financing arrangement that provides all the features and benefits they need to support their business goals. All the while, doing so without the hurdles and headaches that were once an unavoidable aspect of the small business financing process.
Somewhat ironically, however, the increased breadth of small business financing choices that have empowered small business owners have also made it all the more important that entrepreneurs understand the details (and potential drawbacks) of any financing arrangement they consider — including what the application, approval and funding process entails, and the costs and terms associated with the financing.
A Complete Guide to Small Business Financing
This guide to small business financing was developed to ensure that entrepreneurs understand the options they have when it comes to finding the right type of small business financing, and some of the most important considerations that play a role in small business financing, including:
- Ways you to determine whether you need to seek small business financing
- Which types of small business financing options may be the best fit for your business’s stage in its unique business cycle
- How to determine which financing criterion your business will meet based on factors such as the amount of time your business has been operating, its past and future revenue projections, the volume of your monthly sales, and how much financing you’ll seek
- The role that your business and personal credit history may play in small business financing, along with options for finding financing when you don’t have an established business credit history
- How to determine how much small business financing you should seek based on the terms, fees and other potential risks or costs
- The different types of small business financing that are available, including merchant cash advances and the advantages such financing options can offer businesses
- The important role that convenience and time can have on the small financing application, approval and funds transfer process, particularly if your goal is to have credit in times of limited cash flow
Read on to learn more about the small business financing options that could support your business, and to build the knowledge you need to ensure you’re able to find the right financing for your business needs.
This complete guide to small business financing was provided by Tim Roach. Tim is the co-founder of Lendr, a provider of merchant cash advances for small businesses. Roach holds a B.S. in Finance from Linfield College, and previously served in the United States Navy. Before joining the team at Lendr, he founded Oak Street Trading, a proprietary trading firm, in 2002.