3 Ways for Small Businesses to Secure Lines of Credit
When you own a small business, it can sometimes be difficult to get the funds that you need to get started or to expand. Most people don’t have the money to pay for this out of their own pocket, so they need to find some form of financing. Along with the more traditional methods, there are newer ways to finance your business that are becoming more popular. The following are a few options.
1. Get a Bank Loan
When you think of financing your business, this is most likely what comes to mind. A bank loan is often the first method that a business owner tries. This can be a great option for more established businesses or those with a long history of good credit. For those who are just starting out, however, it can be more difficult. Little or poor credit history can cause you to be denied for this type of loan.
2. Find Investors
If you have trouble getting a loan from a bank, something else you might want to try is finding individuals to invest in your small business. These can be people that are interested in your business or even people that you know personally, such as family, friends, and colleagues. This type of financing does not have any strict requirements; you and your investors can come up with your own terms.
3. Use the SBA 7(a) Loan Program
For those that would prefer a loan but are unable to get one on their own, the SBA can help. While they do not provide the loan themselves, they can make it easier for you to be approved. When you get a loan through the SBA, lenders will often feel more comfortable providing money to those that might be considered a higher risk.
If you need financing to grow your small business, remember that you have several options. Consider each one carefully to determine which method best fits your needs. You may even decide to try out more than one.