Guide to Small Business Financing

Your Ultimate Guide to Small Business Financing

Your decision to borrow funds for your business and which lender to work with is important. There are many factors to consider to make the right financing choice for your business.

There are a lot of different types of financing to explore. You’ll need to weigh the application process, rates, fees, and requirements for each lender you consider. Because your choice of financing can impact the future of your business, here is some ammunition to help you evaluate all your options.

Check out our guide to help you navigate your financing journey.

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In the Ultimate Small Business Financing Guide, we cover:

  • An overview of the industry
  • Traditional Financing Options
  • Online Financing Options
  • Minimum requirements by financing type
  • Understanding rates, costs, and fees
  • Questions you should ask along the way
  • A glossary of financing terms
  • A list of helpful educational resources

Continue reading for a quick summary of the Ultimate Guide to Small Business Financing. Download the guide here.

Industry Overview

Finding capital to finance growth is one of the biggest challenges facing a small business owner today. Technology is changing the way small business owners acquire funding, for the better.

Small Business Financing Options

Traditional Financing Options

Traditional Lenders tend to have a long application process, require significant paperwork, do personal credit based evaluation, only lend large amounts, and require specific high-value collateral.

Traditional financing types include:

  • Bank Term Loans
  • Bank Lines of Credit
  • SBA Loans
  • Merchant Cash Advances
  • Factoring
  • Equipment Financing

Online Financing Options

Online Lenders tend to have a quick application process, request limited paperwork, evaluate your creditworthiness based on the health of your business, lend smaller amounts, and do not require specific high-value collateral.

Online financing types include:

  • Online Term Loans
  • Online Lines of Credit
  • Crowdfunding
  • Loan Matching Sites

Minimum Requirements by Financing Type

Small Business Financing Options Minimum Requirements

Understanding Rates, Costs, and Fees

You should always ask as many questions as you need to understand exactly how much you’re paying back. Sometimes rates, like AIR and APR don’t tell you the whole picture.

What is APR and what is AIR explained

Questions to Ask Yourself:

  • What business need am I borrowing for?
  • How quickly do I need the capital?
  • What do my personal credit score and business credit profile look like?

Questions to Ask a Lender Before You Apply:

Questions to Ask Before Accepting a Financing Offer:

  • Will I get the amount that I need?
  • Is this offer a good fit to meet my business needs?
  • Does my business have the cash flow to make the periodic payments?
  • Will this lender report my good payment history to the business credit bureaus? (Why is this important for your business? Click here.)
  • Are there any fees associated with the financing option offered?

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