Cash at hand: credit and loan options for your growing small business
Monday, 22 July 2019
A growing business is a good thing—but it's not without unique challenges.
One issue small business owners face is financing that push to the next stage, whether it's equipment upgrades or cash to meet payroll for new hires. But no matter what your growing business needs, there are credit options that can help you close the gap between where you are and where you want to be.
Let's have a look at some savvy lending solutions that can help you grow your small business—today and tomorrow.
Business lines of credit
Would you like to have the security of knowing there's cash available for your business whenever the need arises? If so, a business line of credit may be an ideal solution. Lines of credit are typically available as both secured (backed by collateral owned by your business and a guarantor required), and unsecured (no collateral and a guarantor required).
The amount available through your line of credit will be determined by an underwriting process, but drawing funds can be as simple as writing a check, making an online transfer, or calling your business banker.
Ideal for: short-term cash needs, purchasing inventory, improving overall liquidity
Business credit cards
There's not a small business owner who hasn't ponied up their personal credit card in order to make a business purchase. Why not free up your personal credit, and let your business build its own credit instead? Business credit cards allow you to make everyday purchases—from office supplies to airline tickets—while keeping your personal credit personal. Many business credit cards also offer awards or point-related programs that reward you for purchases.
Ideal for: day-to-day business purchases, business-related travel, filling inventory gaps, unexpected purchases
Business term loans
Many growing businesses realize they may need additional equipment, upgrades, or even more working capital to fund long-term expenses. This is where a business term loan can come in handy. They allow your business to borrow a set amount and have fixed installment payments over a set term for repaying the loan. These loans are typically available as either secured or unsecured, and with terms up to five or ten years —depending on your business industry and use of loan proceeds. Business term loans can also be used for build-outs for commercial rental space to be developed.
Ideal for: infusing working capital into a company, capital equipment purchases
Small Business Administration (SBA) loans
An SBA loan is partially guaranteed by the federal government. This means these loans offer features that are not typically available with other types of small business credit options. SBA loans generally have longer terms than many other small business loans, as well as more lenient collateral requirements.
If you're considering applying for an SBA loan to meet the growth needs of your business, meet with a business banker who's skilled at guiding small business owners through the SBA loan application process. While it's not without hoops to jump through, an SBA loan could be the infusion of cash your business needs to succeed.
Ideal for: purchasing business real estate (some limitations may apply), construction or expansion, capital equipment purchases, working capital, debt refinancing
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
Links to third party sites are provided for your convenience and do not constitute an endorsement. BBVA USA does not provide, is not responsible for, and does not guarantee the products, services or overall content available at third party sites. These sites may not have the same privacy, security or accessibility standards. Consult your legal counsel for advice concerning your specific business activities.
You may also be interested in:
Commercial billing FAQs for business owners
Commercial Billing Service offers business owners steady cash flow with fewer headaches. Here's how it works.
Business snapshot: How I got funded
Sometimes the best business ideas are accidental ones. This was the case for Event Farm, a company borne out of its unique funding process. Learn more!