How can I find flexible financing for my business?
On a “typical” day, a small business owner may reach for his or her business credit card to pay for normal expenses. For short-term financing needs, that’s a great option. However, business, like life, is unpredictable. You never know when opportunity might strike or when you might hit an unexpected bump in the road that could require additional funding or financing. Therefore, if you encounter a situation where your trusty business credit card doesn’t meet your needs, here are a few other flexible financing options to consider:
A line of credit - These flexible loans give you access to a specific amount of money you can draw from and repay again and again as business needs arise. Because you only pay interest on the amount you use, a line of credit can be a great way to finance short-term operating expenses.
Term loans – These “lump sum” loans provide borrowers money up front which will be paid back at fixed intervals. They are attractive to borrowers due to their ability to be repaid over a long period of time and typically have lower interest rates than other options. They are often used as a good way to quickly increase capital in order to raise a business’ supply capabilities.
Equipment Financing - If you need to upgrade your equipment, automate your manufacturing processes or improve your data security against cyberattacks, equipment financing may provide the flexibility you are looking for. An equipment loan can be structured as a term loan, a line of credit or a combination of the two. Not only does the loan offer flexibility in how you use it, but also the repayment plans can be more flexible than those of traditional term loans.
The Bottom Line: Small businesses need financing flexibility to address the ups and downs that are part of every company’s life. By identifying your options and planning ahead, you can be prepared when the unexpected happens.