Starting a business can be daunting, and financing is one of the key challenges that most entrepreneurs face. Whether you’re looking to start a new venture or grow an existing one, securing financing can play an essential role in your success. In this blog post, we’ll explore the many uses of business financing and how it can help you achieve your goals.
1. Starting a Business
If you have an idea for a new business, you’ll need financing to get started. Business financing can help you cover the costs of setting up your business, which includes everything from office space to equipment to inventory.
2. Business Expansion
If you already have an established business, financing can help you take it to the next level.
The costs associated with Business expansion can include hiring new employees, launching new products, expanding your marketing efforts, or even acquiring another business.
As you can imagine, none of the above is exactly cheap. That’s why most businesses resort to financing as the most effective way to fuel their expansion plans.
3. Maintaining Cash Flow
Even successful businesses can experience cash flow challenges. All it takes is for a couple of customers to fall behind on their payments for your cash flow to strain.
If your business is struggling to cover expenses, financing can help bridge the gap by covering ongoing expenses, such as payroll, inventory, rent, and utilities.
4. Investing in Equipment and Technology
No matter the sector, most businesses require some type of equipment or technology to operate effectively.
Whether it’s a new truck for your delivery service or a software upgrade for your accounting department, equipment financing can help you get the equipment and technology you need to succeed.
5. Building Business Credit
Finally, business financing can help you build and maintain your business credit.
Establishing credit is essential for business success, as it can help you secure better financing terms and even lower your insurance premiums.
By using business financing responsibly and making timely payments, you can build a strong credit profile for your business.
What Are Your Business Financing Options?
When it comes to business financing, you have different options at your disposal. Below is a review of the most important, so you can make the best decision for your organization.
1. SBA 7(a) Loans
SBA loans are loans that feature longer repayment terms and more competitive rates than other alternatives because they are partially guaranteed by the Small Business Administration (SBA).
7(a) loans and 504 loans are the two most popular SBA lending programs.
2. Conventional Loans
If what you need is flexibility, then conventional loans are for you. The requirements for this type of loan can be more stringent than SBA loans, but they give you more freedom about how you can use the loan proceeds.
3. Bridge Loans
The name says it all: bridge loans help you cover gaps in your business plans
This a short-term financing solution that allows you to get fast access to cash while you secure more permanent funding.
To learn more about bridge loans, read our previous post, “Bridge Loans, the Ultimate Guide.”
4. Revenue-Based Loans
A revenue-based loan, also known as revenue-based financing, is a type of funding where you agree to pay off the loan with a percentage of your future revenue.
This is the perfect alternative if you are in a line of business that experiences seasonal fluctuations. Unlike traditional loans that have fixed monthly payments, the repayment amounts for revenue-based loans fluctuate with the business’s revenue.
To learn more about revenue-based loans, read
Gellyfish: Certainty of Execution in Commercial Loans
At Gellyfish Commercial, we offer commercial real estate financing solutions with the certainty of execution you need to take your business to the next level.
We are located in Riverside, and work with clients all over California and beyond. Contact us today by email (firstname.lastname@example.org), telephone (877-800-4493), social media (Facebook, Twitter, LinkedIn), or through the live chat on our home page to schedule a free consultation.