Starting a business is always a challenge: your goal might be to make money, but you have to spend money to get there.

There’s lots of costs required to go from “let’s do this” to the first sale, including permits,  equipment and payroll. Physical locations require utilities, rent and furnishings.

No wonder a small business loan can be an attractive option. These are especially popular for new businesses trying to get up and running, as well as existing businesses that might need a financial bump to ramp up, such as wanting a new product line or a new location.

So a goal should be look for a small business loan that works best for your business, including your budget.

There is a wide variety of small business loan types available, with different terms and conditions as well as restrictions. Deciding which option should entail serious research into how the loan will be structured, how long to pay it off, and any penalties.

Most lenders ask that you be thorough in your application and business plan – they’re more likely to fund something if it looks like you’ve put thought and research into your enterprise, including realistic expense and revenue projections.

Small business loan options include:    

  • Conventional loans. Your bank or credit union may extend a loan especially a local lender familiar with the region. But many of these institutions are notoriously risk-averse, so may be reluctant to lend to people without a thorough plan or a past history of doing well. 
  • The Small Business Administration is considered a useful starting point for many new businesses. You can still go through your local institution, but the SBA will help minimize the risk for them by covering up to 90 percent of the loan. The process may take longer than a conventional loan due to extra paperwork and processes. 
  • Alternative financing. These might be useful for those with weaker financial histories who may not quality for traditional loans. But they also can be approved faster so you can get right to work making money.  

For more financing options, visit IRC Commercial Lending.