If you need funding for your startup or growing business, you may be researching small business loans. Getting access to capital should boost your company in a multitude of ways, potentially allowing you to purchase inventory, hire needed staff and more. Before you invest your personal savings or ask a friend to provide you with a loan, you should probably spend some time evaluating all options that are available. Consider the following ways in which you may be able to fund the growth of your small business.
Getting a bank loan could an ideal solution if you are able to qualify. These institutions generally offer fair, competitive rates and may be especially interested in working with local business owners. Meeting eligibility requirements might be your primary obstacle when considering a bank loan. Major financial institutions sometimes have relatively stringent qualification standards. If you are in a solid financial position and have a strong credit history, a bank loan could be worth pursuing.
The Small Business Administration could be another option for your growing startup. This organization is generally focused on helping small companies access the capital they need for growth and expansion. If your company is for profit and does business within the United States, consider checking with the SBA to see if you could be eligible. These small business loans generally have favorable, low-cost terms, but you might have to wait a while to receive financing through the SBA.
Beyond traditional sources such as banks and credit unions, you also may be considering alternative options. Peer-to-peer lending and microlending are growing trends within the small business world. You may even be able to find nonprofit groups that focus on offering fair rates to entrepreneurs. When diving into the world of alternative lending, it is important to carefully evaluate every option to make sure you fully understand the terms. If you are just getting started, consider asking advice from more experienced entrepreneurs who have employed alternative lending in the past.
If you have personal savings, you might consider using them to fund your growing company. This method works for some small business owners, but it does carry some risk. Personal funding may be an option if you have significant savings that you feel are not serving you as well as they should, and if you are very confident in the likely success of your company.
When you think about getting small business loans, you will probably find many available options. Before committing to a strategy, try to research and consider bank and SBA loans, alternative lending, personal funding and more.