Starting a business is probably one of the most exciting things you can do. You finally get to put your plan into action, hire the folks you want to, stimulate a local economy, serve your community, meet a market need, become your own boss — the whole nine. But when it coming to funding a start up, that excitement can quickly wane as you spend your time looking for ways to come up with the capital to make your dream business a reality. Here are three business funding options you might consider pursuing.
Short term loans
A short term loan is exactly what it sounds like. An institution like a bank will lend you capital in the sort term, and you’ll have to pay it back in a shorter amount of time than other types of loans. This type of loan is generally not based on credit and is useful if your business is experiencing cash flow problems and you need a smaller amount of money faster.
Long term loans
Long term loans are also exactly what they sound like. These loans are based on credit and are usually large amounts that can be paid back over an extended amount of time. These types of loans are ideal for buying equipment, construction, and any other large expenses that come with funding a start up.
Perhaps one of the best options for funding a start up is a Small Business Administration loan, which are available to small business owners who cannot find funding on reasonable terms elsewhere. These loans do not come from SBA itself, but are rather facilitated by them with less risk to the lender because SBA ensures that the loan will be paid back.
Whichever of these options you choose, you should know that lending to small businesses is increasing. Small businesses are in better positions than they were just a few years ago, and finding the funding available for small businesses is getting easier. Learn more.