Opening up and running a small business is more common than you may think. In fact, there are around 28 million small businesses throughout the United States. Of those businesses, 22 million are individually operated with no employees, while the remaining 6 million are owner operated with employees. If you are considering starting a small business, you may need to set up financing at some point in the near future. Here are three financing options you should consider looking into if you are interested in starting a small business.
Small Business Loans
One popular option for small business financing is a small business loan. There are plenty of small business lenders who are willing to back these loans with the encouragement of the Small Business Administration, so you can start or expand your small business. Small business loans are available through banks, credit unions, and even online lenders. There are plenty of options available, and comparing your options can lead to the best interest rates possible. On average, the interest rate for a conventional small business loan is between 4 and 6 percent. While applying for a loan, your personal credit score and your business credit score will be taken into account.
Business Line of Credit
Another form of financing that you may want to look into for your small business is a business line of credit. Lines of credit allow you to borrow when you need to. If you need temporary credit and you have the ability to pay back the debt fairly, a business line of credit can be a powerful tool to have at your disposal. With a business line of credit, you are able to borrow money up to a certain predefined limit. Lines of credit for small businesses typically range from $5,000 to $150,000, and interest rates can vary from lender to lender.
Small Business Credit Cards
Small business credit cards are another form of financing that many small businesses find helpful. There are a lot of benefits to using small business credit cards. Many offer rewards, and they can be very useful in a variety of situations. The interest rates for small business credit cards can vary depending your credit score and the credit score of your business. However, they can be a great form of financing for many small businesses.
If you are starting a small business, chances are that you will need some form of financing. Some options that may work for you include small business loans, business lines of credit, and even small business credit cards.Share