An SBA loan is a long-term, government-guaranteed loan. Because the Small Business Administration is guaranteeing the financing, lenders can offer a lower interest rate than if you went to a bank.
Consider an SBA loan if you want a lower interest rate than what the bank offers or don’t qualify for a bank loan.
BUSINESS LINE OF CREDIT
A term loan is like a traditional bank loan. You’re lent a fixed amount of funds upfront. Then, you pay that back plus interest over a set amount of time.
Term loans are great if you need the money to grow or expand your business.
With a line of credit, you can borrow up to a maximum amount. You can use the money as you need it, but you only pay interest on the amount you actually borrow.
Consider opening a line of credit if you need help paying short-term expenses.
MERCHANT CASH ADVANCE
If you accept credit cards, you may qualify for a merchant cash advance. A financing company gives you capital in exchange for a percentage of your daily credit card sales and a fee. You’ll pay less during slower weeks because you won’t have as many credit card sales.
If you have outstanding invoices and need steady cash flow, you can sell those invoices to a lender. The lender gives you a portion of the invoice amount and holds onto the rest until your customer pays the invoice. Think of it as a cash advance
Equipment financing helps you buy the equipment you need for your small business – whether that’s computers or machinery.
Because you’ll use the equipment you’re buying as your collateral, equipment financing is a great option if your credit score isn’t high