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How to finance a growing company
A small or average company might face many challenges that require more significant financial support in its growth stage. At this time, financing becomes a critical pillar to comply with the necessary strategies that will further boost the business’s operation.
Obtaining financing through a loan from traditional banks can be favorable in a growth phase. Due to the amount you can receive since business loans are helpful to cover the expenses that they usually have throughout their lives.
Learn about small business financing options.
Supporting the operation and expansion of a growing small business often requires some additional financial assistance. Arranging a small business loan can help you fill the gap when you need to make capital investments, grow your workforce, or move to a larger space. To help you decide what type of financing might be right for you, here are some great small business-financing options:
Credit line: Using a credit line as working capital can make it easier for you to handle your cash flow when your income or fixed cost fluctuates. It lets you borrow only the funds you need, allowing you more control over the amount of interest you will accrue.
Fixed-Term loans: For huge investments, it might be time to get a fixed-term loan. Like a home loan or personal loan, fixed-term loans include fixed interest rates and monthly payments over a time of years. It will give you a large sum of cash. These loans can be perfect for expanding your space or financing other significant investments.
Business loans: For established businesses that own commercial real estate, a business loan is another option. Like a home equity loan, a business loan allows you to borrow for your business property equity. It depends on the assets’ worth and the net price you own; this could mean more debt capacity.
“For larger investments, it might be time to get a fixed-term loan.”
Equipment loans: If you need cash specifically to finance the purchase of new equipment in the company, including vehicles, manufacturing or production machinery, farm equipment, or other necessary equipment, then an equipment loan or leasing program might be what you need. These loans offer fixed interest rates and payment plans over a specified time.
Loans guaranteed by the Small Business Administration (SBA): SBA-guaranteed 7 (a) loans have longer repayment terms and lower down-payments than most regular bank loans. They can be useful to purchase owner-occupied real estate, business acquisition, purchase of equipment, or working capital.
Federal or state grants: Money that does not need to get repaid is limited and more difficult to obtain than loans. Federal and state business grants get funded by taxpayer money, and the money gets awarded through a complicated legislative process
By knowing available small business finance options, you’ll have a fair idea of where to look for when you want to take your business to the next level.