The Best Sources for Small Business Loans
What are the best sources for small business loans? The answer might surprise you. Your bank likely isn’t it. Aside from many people blaming banks for the Great Recession, bank business loans tend to be no less than six figures, and small businesses rarely need this much cash. You will also be subject to an extensive loan application process, and even if you are approved, you won’t see you money for four to six weeks. Not a viable solution? No problem. Check out these sources instead.
Bootstrapping is a term that means you are borrowing money from your personal assets. Liquid assets means immediate cash or something you can turn into immediate cash. If you need money to get your small business off the ground, or you if you had hit an unexpected financial woe, you might not need to take out small business loans at all if you have the cash on hand or liquid assets to finance your money needs.
SBA 504 Loans
If you are minority-owned business, such as veteran or woman-owned entity, or you have a Community Development Company in your area, you might qualify for an SBA 504 loan. This money is lent for the specific purpose of purchasing large fixed assets, such as the property where you will run your company. The lenders are in business to build their local community, so if your business is also being opened with this intent, you might this funding to be a viable option for your needs.
Some other financing the SBA can get you in touch with is micro lending. Micro lenders are nonprofit or personal financiers looking to help small businesses with their financial needs. The small business loans they offer are less than a big-bank loan, usually capping out at $50,000, and the terms are more desirable as well. Micro loans offer long-term payback schedules with lower interest rates.
If you need cash right away and you don’t have the assets to bootstrap, you might consider alternative funding such as a merchant cash advance or peer-to-peer lending. These resources do have higher interest rates generally, but they offer lending to those with little or no credit, and you can expect your cash quickly, sometimes directly deposited into your account within 24 to 48 hours. For those in need of small business loans right away, this option might work best to meet your temporary financial needs and keep your business up and running.