Plenty of people dream of operating their own small business. The opportunity to do something you love, to be your own boss, and to exert greater control over your economic circumstances is an understandable and admirable goal.
But operating your own business is a challenge, and one of the biggest reasons is money. Simply put, it is very expensive to get a new business up and running, and to develop sustainable profitability over time.
It certainly can be done, but unless you are independently wealthy, successfully starting a new business will require some sort of financing at the outset (and maybe even some later on, as well). With that in mind, read on to learn about three types of loans you might consider when starting your own small business.
SBA loans are a class of loans partially backed by the federal Small Business Administration. These loans are intended to support entrepreneurship, and thus often advertise terms and conditions favorable to new business owners.
SBA loans, in short, can be an excellent way for new business owners to find financing. They offer numerous types of loans — including 7(a) loans, CDC/504 loans, microloans, lines of credit, and more — ensuring there are realistic options for all sorts of businesses. While they often take some considerable paperwork and a potentially lengthy application process, this can be a great way to raise needed funds.
Lines of Credit
While typically insufficient to open a new business, lines of credit can be very useful for new business owners. By offering flexible credit up to a certain limit, lines of credit ensure that as a business owner, you have funds to draw upon when you need them. Whether it’s covering payroll, purchasing supplies, or conducting a needed repair, the extra cash provided by a credit line can help get you through a tight financing spot.
Crowdfunding can also be a useful avenue for the new small business owner. In some cases — for instance, if you have a substantial social media presence, or a wealthy social circle to draw upon — crowdfunding may be able to help you raise substantial amounts of money for your small business.
In short, while starting your own company is expensive, there are ways to do it. The options above provide helpful places to start as you work to raise the funds to make your dreams of small business ownership a reality.