How a Small Business Loan Can Help Your Iowa Small Business
A wide variety of small businesses call Iowa home. Businesses in the healthcare and social assistance industries, as well as accommodations and food services, manufacturing, retail and construction are some of the top small business sectors in the state. No matter what type of business you are running in this midwestern state, there’s a good chance you’ve experienced the frustrations of getting access to capital. Here we’ll explore some of the options available to Iowa entrepreneurs looking for small business loans.
As a small business owner you know what your small business needs. It ent, more workers, a marketing budget, or maybe a combination of all of the above.
A small business loan can help your business by giving you the funds it needs to take advantage of opportunities to stabilize or expand. But finding the right type of financing can feel confusing and overwhelming at times. There are many different types of financing available, each with its own pros and cons, as well as eligibility requirements.
Lines of credit
If you need working capital, a line of credit may be a good financing option for your small business. Basically it gives you access to a specific amount of credit you can borrow against. You can use as much (or little) of that money as you want. As you pay back what you owe, you get access to that financing again.
Term loans
If you have a good idea of how much money you are going to need for a specific project and the sum is large enough that it would take you several months or years to pay it off, a term loan may be a good option. These types of loans offer the borrower a lump sum that they pay back in monthly payments over 2-5 years or more. (Some commercial term loans, including certain SBA loans, may offer repayment periods of as long as 25 years.)
Business credit cards
If you need a relatively small amount of capital quickly, a business credit card may be a good option. Oftentimes business owners who have good personal credit scores and sufficient income overall can get a business credit card. This provides access to short-term financing, though interest rates can be high. (You may want to seek out 0% APR offers for low-cost financing.) Another great thing about business credit cards is that many of them help you build business credit when you make your payments on time.
Commercial real estate loans
If you are thinking about getting that bigger warehouse or a bricks and mortar location for your business, a commercial real estate loan will often be your best financing option. It can provide long-term financing at lower rates due to the collateral of the property.
Equipment financing or leasing
If you are looking to get new equipment for your small business, look into equipment financing or leasing. It’s helpful for preserving cash flow and may provide tax benefits as well.
Invoice factoring or financing
If you need to get financing for your business quickly and you regularly invoice other businesses, invoice factoring or financing can help you get paid faster. Oftentimes this financing involves selling your invoices to another company at a reduced rate.
Merchant cash advance
If your business has a strong record of sales in the past- especially in the form of credit or debit card sales- you may be able to get an advance against future sales. Daily or weekly payments will likely be taken from the businesses’ future revenues or bank account. Good credit isn’t required for most merchant cash advances.