As a small business owner, you may be looking for ways to secure financing for your business. There are a variety of lending tools and commercial lending options available to you, depending on your needs and the stage of your business. Here's a look at some of the most common lending tools and options available to small businesses.

SBA 7a and 504

SBA 7a and SBA 504 loans are two of the most popular loan products offered by the Small Business Administration. Both loan programs can be used to finance a wide variety of business expenses, but there are some key differences between the two. SBA 7a loans are typically used for shorter-term financing needs, such as working capital or equipment purchases. SBA 504 loans, on the other hand, are often used for long-term projects such as real estate purchases or renovations. SBA 7a loans may also come with a prepayment penalty clause, which is not typically found in SBA 504 loans. Before applying for an SBA loan, it's important to understand the key differences between the two loan programs and determine which one is best suited for your business needs.

Invoice Factoring

Invoice factoring is a type of financing that allows you to sell your invoices at a discount in order to get cash up front. This can be helpful if you have customers who take a long time to pay their invoices. The factor pays you an advance on your invoices and then collects payment from your customers when they eventually pay the invoices. The factor charges a fee for this service, which is typically a percentage of the invoice amount.

Working Capital Loans

Working capital loans are short-term loans that are used to finance everyday business expenses such as inventory, payroll, or marketing costs. These loans are typically repaid within six months to one year. Working capital loans can be either secured or unsecured, but they are usually unsecured because they are based on your business's overall financial health rather than any specific collateral. 

There are many different business lending options available for small businesses. Which one is right for you will depend on factors like how much money you need and how quickly you need it. Carefully consider all of your options before applying for any type of loan so that you can choose the best option for your needs.