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No matter your business’s size or industry, it is important that you have a growth plan. It will allow you to see where you see your business in the future. You should review your plan quarterly and make sure that you are on track to meet your goals.
A small business loan can help you stick to your growth plan, especially if you don’t have unlimited cash on hand and want to avoid cash shortages. Today we take a close look at the best small business loan options for growth plans so that you can choose the best financing option for you.
5 Business Loan Options for Growth Plans
Inventory Loans
It is important to have your shelves stocked with products that your customers want. This is true if you’re planning to increase your inventory offerings in the future.
With a business inventory loan, you can receive the funds you need to cover the cost of inventory. If you fail to repay it, the lender will seize the inventory. Inventory loans come with short terms, typically from three months up to three years.
If you own a retail store, wholesale company, or specialty shop, this is a good option for you. If you own a startup and have never purchased inventory in the past, you’d be better off with a business credit card as inventory loans are intended for businesses with a history of purchasing inventory.
Equipment Financing
No matter what industry your business is in, you likely depend on equipment to provide your products and services. Whether it’s an oven, computer, tractor, crane, or any other type of equipment or heavy machinery, an equipment loan may be a great choice.
Equipment loans provide business owners with funds to cover the cost of new equipment or updated equipment. Most lenders will require a down payment and offer a loan amount that ranges from 70% of 100% of the cost of the equipment. If you default on your loan, your financing lender will repossess it because the equipment will serve as collateral.
Real Estate Loans
Real estate loans are ideal for growth as they can help you afford expenses like buying a commercial property, renovating a property you own, and refinancing existing real estate debt. There are many types of real estate loans such as bridge loans, SBA loans, and hard money loans. Terms vary from lender to lender and repayment terms are usually very flexible.
Keep in mind that if you do apply for a real estate loan, you’ll likely have to meet strict funding requirements and may have to wait a bit to get approved.
Alternative Lender Loans
It might be challenging for you to get approved for a business loan from a traditional bank. This is true when you own a startup or are a new business owner because you might have credit concerns, lack collateral, or don’t have enough financial statements.
Alterative lender loans make it easy for a growing business like yours to get approved for financing. Compared to traditional business loans, alternative lender loans come with a fast and easy online application process, quick decisions, and fast funding. In fact, some lenders can provide funding within 24 hours.
Business Line of Credit
A business line of credit might be a viable funding solution if you have a growth plan but not sure how much it will cost you.
Business lines of credit are very similar to business credit cards. You will be able to withdraw as much or as little as you want. The credit limit you receive will be based on your business and personal credit scores and financial history.
The Bottom Line
When selecting the best loan for your small business, consider your industry, size, credit situation, and growth plans for the future. Be sure to weigh the pros and cons of each. Once you do that you should be able to select the right product for you.
