Small Business Funding Options
Business funding comes in a variety of shapes and sizes. Learn about the popular types of small business funding, and find out which are the best options for you. Here's the list of 5 options to fund your small business:
A line of credit is a lot like a business credit card: A lender approves you for an amount of money that can be drawn on whenever necessary. You only pay interest on the funds you take out. As you repay the lender, your money is available again without having to reapply for the loan.
Pros & Cons: Lines of credit are among the most flexible loans available for businesses, allowing you to withdraw when you need and repay on a flexible payment schedule. One of the few downsides could be the limit. Every business receives a limit on the amount of financing they can draw, but that amount becomes available again as it’s repaid.
A loan with a term of 3 – 18 months, generally provided by a bank or an online alternative lender.
Pros & Cons: Can be a good option if your company needs business funding for a quick fix or an emergency, but these tend to have the highest interest rates around.
The terms of these loans are generally flexible to a business’s needs and vary as such.
Pros & Cons: Business term loans are good if you have a specific need or goal that necessitates the loan. They can sometimes be difficult to apply for and obtain, and they only allow you to borrow the initial loan amount unless you reapply.
A merchant cash advance provider reviews a potential borrower’s daily credit card receipts and determines if they can repay the cash advance in a timely manner. Then, a small business “sells” a portion (cost expressed as factor rate) of those credit card sales to the lender to acquire the advance.
Pros & Cons: These can be a reliable method for receiving fast funding, but keep in mind that factor rates are not equal to interest rates. The actual cost is typically more expensive than any other small business funding.
The Small Business Administration is a government agency that helps encourage lending to small businesses by guaranteeing a portion of the loan.
Pros & Cons: Without the SBA’s guarantee, many lenders would not consider working with startups that have little experience or business credit. But SBA loans require more paperwork and more time to secure the loan, and approval is still far from guaranteed. These loans also require good credit.
Fund Your Small Business With Headway Capital
At Headway Capital, we fund qualified businesses with lines of credit up to $100,000. Small businesses can use these funds for a wide range of business expenses, be it for working capital, equipment, inventory or payroll. If approved, you can borrow as much as you need (up to your credit limit), as many times as you need to, without having to reapply. As you repay the amount you’ve drawn, your available credit is replenished, so you can keep your business running at full strength at all times.
Business line of credit
12, 18 or 24 months
No Hidden Fees
See our Rates & Terms for details
Weekly or monthly
Clear payment terms, interest does not compound, no penalty for early payoff
FAQ About Business Funding
Where can I get small business funding?
Small business funding comes in many shapes and sizes, which means it also comes from many places. Some of the most common ways businesses receive funding are through investors, banks, alternative lenders, credit unions, microloan intermediaries, and government grants and subsidies.
What are the types of business funding?
How do small businesses get funding?
How can I get funding for my business with bad credit?
1We always do a soft inquiry unless your credit file is restricted, in which case we would ask you to contact the credit bureau to lift the restriction. Doing so may result in a hard pull.