Difference Between a Small Business Loan and Small Business Funding

Financing Your Small Business

The business world is competitive, there’s not doubt about that. In order to achieve success, an ambitious small business must find ways to out perform others within their market. A great location and quality product are both critically important to a business’ reputation and long-term sustainability, but it is inbound revenue that ultimately takes precedence as the highest priority goal. A small business must be able to fight their way through the rough in order to surpass their cutthroat competition.

One of the best ways to gain a firm foothold working your way up the ladder is securing financial support. Funding for small business allows the company to work with capital so they can invest in future growth opportunities. During the search for the right plan, it’s not uncommon for businesses to become confused between small business loans and small business funding. They may sound almost exactly the same, but they are inherently very different. Here’s what you’ll need to know in order to differentiate the terms while searching for the best business financing option.

What is a Small Business Loan?

The concept of the average loan may be familiar to most but there is slight variation in comparison to a small business loan. Established businesses will have a much easier time acquiring a loan, however that’s not always the case with smaller scaled companies. Lenders are often reluctant to distribute a loan to a business lacking good credit or a firm financial background. Since small or new businesses often don’t have access to a large amount of finances, there’s not much to work with because the issuer cannot totally “trust” the applicant. Small business loans on the other hand are geared for this exact situation.

A small business loan can efficiently fund a business and completely bypass the help from banks and credit unions. There’s a massive directory of small business loan providers but they don’t come without slight disadvantages. Specific repayment guidelines will be set along with an interest rate that typically cannot be negotiated in return for taking on the financial requirement. You may have received the money you need to grow, but some of the repayment guidelines are often not ideal.

What is Small Business Funding?

Small business funding is a form of specialty financing designed to support small to midsized businesses without strict criteria for approval. These plans focus on the business’ growth without stripping away their financial stability.

Is Small Business Funding Worth Exploring?

Searching for the best way to fund a small business should come with a no strings attached solutions. In fact, it should even benefit the business itself. A small business fund provides more reliable, customer-focused support versus that of a loan. This form of financing can be custom fitted and tailored to the exact needs of a business. The options provided by reputable business financing lenders often include flexible packages and unique repayment standards.

As an alternative to small business loans, funding providers understand how modern day business functions. Repayment plans can be set up to fluctuate with sales volume. This puts the payment structure in your hands without sacrificing valuable cash flow. A specific percentage will be taken from the day’s sales, leaving you with money to continually work with. Think of it like a variable rate on a loan – except it’s in the business’s benefit and doesn’t pull more than you can reasonably afford. Small business funding also does not require collateral or great credit to apply.

Funding a Small Business with Personal Support

Avoiding unreasonable terms, crippling interest rates and tying up your cash altogether, Lendr has perfected a new form of financial support. Small business funding provides the support and financial clarity an establishment needs for a fair shot at success. Before searching how to get funding for your small business or sifting through hundreds of dead ends, consult the expert nationwide assistance from the Lendr team. Our small business funding sources are readily available for you to explore so we can create a plan that works for you. Feel free to contact us today to apply for personalized business funding and partner with Lendr for the quickest access to a fair growth plan today!

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