The Best Financing Options to Help Drive Small Business Growth

Small-business funding is necessary to sustain consistent, long-term growth. Opening a line of credit for the business can provide you with the support you need to keep moving forward, even during challenging times. We’ll walk you through your options—and help you determine which financing strategy is right for your business.

Financing Options for Small Businesses

1. Working capital line of credit
Fluctuating cash flows can be a source of uncertainty for small businesses. An open line of credit bridges the gap between product sales and incoming revenue, particularly for businesses that have seasonal needs. A working line of credit gives your business a reliable cash flow to sustain ongoing expenses like payroll or inventory expansion—even while receivable collections are still outstanding. Even better, as you pay down on the line, you have open access to the line of credit time and again, though you’ll only pay interest on the outstanding balance.

Even large businesses experience periods of tight liquidity. As a result, business credit lines are commonly used to support inconsistent revenue collections or ongoing business expenses.

2. Commercial mortgage financing
Should you rent or buy the commercial property? Property costs—for offices, warehouses, or manufacturing sites—are a significant expense for business owners. As a result, how you choose to finance your property can determine your business’ financial viability down the road.

For business owners who are committed to long-term growth, using commercial mortgage financing to purchase and/or renovate a new facility is a simple way to build equity on your investment without depleting your cash reserves. Lenders will usually require the property be owner-occupied, meaning the business takes up at least half of the building.

3. Equipment financing loan
Besides opening a business line of credit, an equipment financing loan can also preserve working capital, offering you a fixed-interest rate opportunity to finance the purchase of the business equipment you needed to grow—such as a new production line, delivery vehicles, medical equipment, or heavy manufacturing machinery.

The Benefits of Working with an SBA Preferred Lender
As you learn more about the best loan for your business, consider working with a partner that can help you secure the correct Small Business Administration (SBA) loan. These are government-backed loans of up to $5 million that are specifically designed to encourage small business growth across all industries. Delivered through a commercial lending partner, SBA 7(a) loans—for example—are part of the Small Business Administration’s primary lending program and generally used to provide financing options for various business needs, from purchasing equipment to securing credit.

First American Bank is uniquely positioned to help your business thrive. The Preferred Lender Program (PLP) is the highest level of authority a lender can have. As one of fewer than 20 banks with PLP status in all of the SBA’s 7(a) programs, our team of experienced relationship managers offers a wide range of SBA loan products, and our in-house underwriting and approval process can help you secure your loan effortlessly and efficiently.