Every business needs capital to operate, thrive, and grow. In most cases, the self-generated capital driven by monthly revenue activities won’t provide enough funds. As often as the need occurs, it may be time to consider different business financing options.

What are the Purposes of Seeking Business Financing?

Business financing can supply capital for many purposes including the following:

  • Working capital. Working capital is the funding that keeps the “wheels of business in motion” by paying the costs of ongoing operations. 
  • Buying new equipment. 
  • Purchasing added inventory. 
  • Expanding staff or hiring upgraded talent. 
  • Seizing an expansion opportunity. 
  • Expanding or improving a company’s physical location.  

Understanding Different Business Financing Options

There are many types of business financing and none of them are considered the “best type.” Rather, each may be appropriate for different uses and each comes with different terms, interest rates, loan amounts, and qualifications:

  • A small business loan or “term loan.” This is a lump-sum loan offered to small businesses and can be used for many purposes. The lender will work with the borrower to define the term and loan amount, depending on the defined needs and qualifications of the business. 
  • A business line of credit. This provides a “funding pool” to draw on as needed. Interest is paid on the amount used and then the amount used is replenished. 
  • Equipment financing. Instead of buying equipment outright, it can be acquired on a monthly payment basis. In addition, the full cost of the equipment may be written off in year one for tax purposes. 
  • SBA loans. These types of loans often come with low rates and long payment terms. 
  • Merchant cash advance. This funding generates money in exchange for future debit and credit card sales. 
  • Accounts receivable financing. This provides funds in exchange for unpaid invoices. 
  • Commercial mortgage loans.  

Seek Expert Business Financing Solutions

Contact LMC Alternative Business Capital, based in Miami, FL to achieve growth through effective business financing. We provide a diverse array of loans to help businesses of all sizes meet their needs.