The Easiest Way To Finance Your Small Business


By Katie Horne

As a small business owner, you are well aware that it takes money to earn money. However, where do the funds you need to either get going or to keep you cash flow positive come from? In this article, we will cover the options available to you as a small business owner.


Wells Fargo bank

The options we have listed under traditional financing options are those you would typically think of when it comes to funding businesses: bank loans, government programs design to spur growth in a certain economic area, or grants to help businesses meet an unmet need.


To get a small business loan, you will need to meet minimum criteria related to credit scores, annual revenue, and the number of years in business.

  • Many banks offer small business loans, and they are usually term loans. Term loans are those that get you a lump sum that is immediately available. You then repay this loan over a fixed amount of time using a set payment schedule. Each payment that you send to the bank includes interest that you owe on the loan.
  • Banks also offer what they call business lines of credit. Such credit lines offer less like a loan and more like a credit card. You get a pool of funds, and these funds are there for you whenever you need the capital. You can use the funds or not, and you are charged interest only on the amount that you draw from your line of credit. When you have repaid what you spent, your line of credit gets “refilled” to its original amount.
  • Lesser known are equipment loans, which are like term loans that cover 80% to 100% of the cost of your new equipment.

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