July 09, 2021

The Best Small Business Loans for Growth Plans

If you already have a growth plan in place, you might notice that some of your ideas will require additional financing. A small business loan can help you stick to your growth plan, especially if you don’t have unlimited amounts of cash on hand and wish to avoid cash shortages. In this blog post, we’ll take a closer look at the best small business loan options for growth plans so that you can choose the ideal financing option for your situation.

5 Business Loan Options to Consider If You Have Growth Plans:

1. Inventory Loans

It's essential to ensure that your shelves are stocked with the products that your customers want to buy. This is especially 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. In most cases, the inventory you buy or the inventory you have on hand acts as collateral for the loan. If you fail to repay it, the lender will seize the inventory. Compared to other loan types, inventory loans come with shorter terms. Terms typically range from three months to three years. This type of loan is a good option if you own a retail store, wholesale company, or specialty shop. 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.

2. 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 are just like they sound; they provide business owners with funds to cover the cost of new equipment or updated equipment. Most online lenders require a down payment and offer a loan amounts that range from 70% of 100% of the cost of the equipment. Most likely, they'll ask you to share a quote for the equipment so that they know how much money to lend you. The equipment will serve as collateral, so if you default on your loan, your financing lender will repossess it. It’s important to note that unlike other types of flexible business loans, equipment loans must only be used for equipment.

3. Real Estate Loans

Real estate loans are ideal for growth as they can help you afford expenses such as:
  • Purchasing a commercial property
  • Renovating a property that you already own
  • Refinancing existing real estate debt
Fortunately, there are many types of real estate loans at your disposal including permanent loans, SBA loans, bridge loans, and hard money loans. Terms vary from lender to lender and repayment terms are usually very flexible. If you take out a real estate loan, you may also save money on your tax bill. In addition, you’ll be able to build equity, which can increase the value of your business as long as you make your payments on time. 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.

4. Alternative Lender Loans

It may be a challenge for you to get approved for a business loan from traditional banks. This is particularly true if you own a startup or are a new business owner because you may have credit concerns, lack collateral, or don't have enough financial statements. Alternative lender loans may make it easier 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 are able to provide funding within 24 hours. These types of loans are typically offered by private companies who are willing to take a chance on businesses. They can approve you for a number of alternative funding options such as:
  • Long and short term loans
  • Business lines of credit
  • Invoice financing
  • Merchant cash advances.
If you’ve had trouble qualifying for traditional business loans in the past, alternative lender loans may be a viable solution.

5. Business Lines of Credit

If you have a growth plan but aren't sure how much it will cost you to meet your growth goals, a business line of credit can be a viable funding solution. Business lines of credit are very similar to business credit cards. Upon approval, you’ll be able to withdraw as much or as little money as you’d like up to your set credit limit. The credit limit you receive will be based on your business and personal credit scores and financial history. When you take out a business line of credit, you’ll only pay back the loan amount you borrow plus interest. With a business line of credit, you may prevent cash flow problems and stay on top of seasonal spending. You’ll find that this business financing option is far more flexible than the other best small business loans.

Conclusion: Steer Your Business Toward Growth By Selecting the Best Business Loan

Your business is unique; therefore, there are several factors you should keep in mind when you shop for the best loans for small business. Consider your industry, size, credit situation, financial track record, and growth plans for the future. Then, compare all the small business lenders and loan products available to you and weigh the pros and cons of each. Once you do that, you should be able to select a loan product that will help you successfully achieve your future growth plans. For more information on how to select the best small business loan, reach out to our knowledgeable capital specialists. Our team will provide you with a free business loan quote, so that you can determine your financing needs. To get started, click the link below: New call-to-action