Running a successful small business is no minor feat. Most fail within the first few years. A lack of time, finances and know-how are often contributing factors to failure. The Small Business Administration cites ‘insufficient capital’ as the second leading cause of failure for small businesses, preceded only by ‘lack of experience.’ However, many small businesses are getting a second chance at life with the help of small business lending.
Small business lending is not a one-size-fits-all solution. There are plenty of different types of lending options for business owners, but let’s look at popular choices for those working with direct lenders:
- General Small Business Loans: For those not completely familiar with how small business funding works, it’s best to think of it as borrowing money from someone who’s actively invested in making your business grow. These loans are meant to help with day-to-day expenses, investments, long-term assets and in the case of financial emergencies. Some business owners choose to get credit cards but the interest rates can be astronomical.
- Small Business Working Capital Loans: These loans are a popular choice among small business lending options. These loans are meant to help finance everyday expenses (payroll, office supplies, etc.).
- Unsecured Business Funding: Unsecured business loans aren’t guaranteed by property so they are bigger risks for lenders. They generally have smaller interest rates than credit cards, which will save you a large chunk of money down the line.
The importance of small businesses in a capitalistic economy is incredible. There are 28 million small businesses in the United States and these companies make up for over half of all sales made in the country. On top of bringing in revenue, small businesses account for more than 60% of all jobs. If you are a small business owner looking for a little help, there are direct lenders who will work with you to find the option best for you.