One of the major reasons that small and medium-size businesses fail is that they simply do not have access to the cash and capital they need to continue to grow, to reinvest into their business, and to expand as their competition does.
And while modern web applications, accounting software, and training programs have definitely helps small and medium-size business owners keep a better eye on their cash flow most entrepreneurs aren’t quite sure of what their options are when it comes to business financing services.
Worse, a lot of predatory operations out there are focused on promising the moon and the stars when it comes to small and medium business financing, providing packages that are anything but a good idea for business owners to take advantage of once you dig a little bit deeper beneath their surface offer.
That’s why we’ve put together this quick guide.
Below we highlight a couple of key sources of business finance that small and medium-sized businesses are going to want to focus on, the kinds of financing services and packages that can help secure the financial future of your business moving forward.
Let’s dig right in!
Traditional Bank Lending
Perhaps the most “old-school” approach to securing the kind of business financing you need to grow and succeed, traditional banks and credit unions in your local area (or national organizations) can be a great resource to get your hands on business funding.
Providing short, medium, and long-term loan opportunities, loan services to handle pretty much any and all opportunities you’re looking to capitalize on, and with a pretty simplified and streamlined process – even if it can get long and drawn out at times – this may be the approach you want to take if you have great credit and a good relationship with banks that you’ve done business with before.
At the same time, sometimes traditional bank and credit union organizations require collateral guarantees to secure certain loan rates, may not have the kind of flexibility you’re looking for as far as repayment terms are concerned, and simply may not be interested in lending to your business based off of its industry, your cash flow situation, or your business history.
Small Business Administration Lending Opportunities
The US SBA lending opportunities all US companies have an opportunity to take advantage of might be perfect for your small to medium-sized business, though there are some interesting little wrinkles here because of the government guarantee you get with these types of loans.
These are some of the most popular small business loans in the US, and for good reason. They give you almost instant access to a tremendous amount of financing because of the federal government guaranteeing the loan, really loosening the pursestrings of the lenders that you are moving forward with.
Interest rates are usually quite low, repayment terms are usually quite friendly, and you have opportunity to shop around with different lenders after you’ve secured a US SBA lending package to find the best deal possible.
On the flip side, SBA loans usually require a decent credit score, a couple of years of business history already under your belt, and a mountain of paperwork to be filled out – with strict rules to be adhered to (like you’d expect anytime the government gets involved) – that can make these a bit of a headache to get started with.
The last small business financing source we want to highlight here is the nontraditional lending industry, and industry that has really taken off over the last few years in the wake of the Great Recession of the mid-2000s.
Around 2007, 2008, and 2009 businesses were really taking it on the chin because of the credit collapse, the bottoming out of the real estate market, and a whole host of other factors that were conspiring against business and finance industries in general.
Traditional lenders were tightening their pursestrings quite a bit, restricting the kinds of loans that they were making available only to those with picture-perfect credit and those with obvious abilities to repay the terms as established.
Because so many small businesses and medium-size businesses were getting turned away by traditional lenders nontraditional lenders like Bruc Bond started to fill the space. Independent organizations, private investors, and even crowdfunding solutions took off like wildfire in the wake of the traditional financing industry sort of turning its back on small to medium-size businesses it was serving previously.