Small businesses are often in need of financing. Being small doesn’t allow them enough working capital within the business having to go to outside sources. Small business financing such as loans offers businesses this money with affordable rates and flexible repayment schedules. To find these good small business financing options it is important for business owners to shop around by looking into multiple lenders and comparing their financing offers.
What is small business financing?
Small business financing is offered by banks and other lending institutions to small businesses. Typically, small business financing is small business loans, but they can also be leases on equipment or real estate property. With a small business loan, a bank or another lending institution is lending the small business money to make purchases or to have working capital within their business. A lease is typically used for equipment or real estate property.
Common uses for small business financing
- Equipment
- Property
- Inventory
- Supplies
- Renovations
- Expansions
Terms and conditions
When taking out a small business loan the lender often requires collateral or a cosigner. If the borrowing business fails to repay the loan the collateral is seized and then sold to cover the loan or the cosigner is held responsible. When leasing real estate or equipment business owner is renting, failure to make payment obligations will result in the seizure of the property. Interest rates and lease/loan terms vary.
How to get small business financing
- Choose a financing option that works best for your business
- Find a lender that offers that type of small business financing
- Make sure your business meets the lenders’ requirements
- Submit an application
- Negotiate the terms and conditions of the loan/lease
- Sign the contract and set up a payment schedule
