#how to get a small business loan
Financing a growing business
Supporting both the operation and expansion of a growing small business often requires some additional financial support. Getting a small business loan or grant can help you bridge the gap when you need to make capital investments, increase your workforce, or move to a larger space. To help you decide which type of funding might be right for you, here are a few great small business-financing options:
Line of credit. Using a line of credit as working capital can make it easier for you to manage your cash flow as your income or expenses fluctuate. It allows you to borrow only the funds that you need giving you more control over the amount of interest you will accrue.
Business loans. For larger investments, it may be time for a term loan. Like a mortgage or personal loan, term loans come with fixed interest rates and monthly payments over a period of years. Unlike a line of credit, a business loan will provide you with a large sum of cash upfront. These loans can be ideal for expanding your space or funding other large investments.
Commercial loans. For established businesses that own commercial real estate, a commercial loan is another option. Like a home equity loan, a commercial loan allows you to borrow against the equity you’ve built in your business property. Depending on the value of the property and the equity you hold, this could mean more borrowing power.
“ For larger investments, it may be time for a term loan. ”
Equipment loans. If you’re specifically looking for cash to fund the purchase of new equipment – including vehicles, manufacturing or production machinery, farming equipment, or other necessary equipment – then an equipment loan or leasing program may be what you need. Like business loans, equipment loans offer fixed interest rates and payment plans over a period of time.
SBA loans. Wells Fargo is the nation’s #1 provider (by dollar volume) of loans guaranteed by the US Small Business Administration – or SBA 7(a) loans. SBA 7(a) loans have longer repayment terms and lower down-payments than most conventional bank loans, and can be used for the purchase of owner-occupied real estate, business acquisition, equipment, or working capital. Wells Fargo also offers the SBA 504 program for larger, fixed asset purchases or construction.
Federal or state grants. Small business grants – money that does not need to be repaid – are limited and harder to secure than loans. State and federal business grants are funded by taxpayer dollars, and the money is awarded through a complicated legislative process. For more information on how to get a small business grant, visit www.grants.gov.
By knowing which small business financing options are available, you’ll have a better idea of where to turn when you’re ready to take your business to the next level.
Business insights from experts