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The 3 Best Financing Options for Commercial Businesses

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It can be difficult if financing isn’t right. Are you looking to ensure your commercial business continues to succeed? Whether it is to increase production, expand marketing efforts, or develop a new product line, it may be time to consider looking into some of the various loan options.

SBA Loans

SBA loans from the U.S. Small Business Administration (SBA) are some of the most versatile options for commercial businesses and entrepreneurs. The SBA offers many different loan types for enterprises of different scales and unique needs.

The SBA matches commercial enterprises with local lenders, mainly national banks, to fund them. The most popular SBA lenders in Philadelphia are TD Bank and KeyBank. Here are some of the most popular SBA loan options:

  • 7(a) loans: This is the most common option for small businesses. You can get up to $5 million in a loan amount, and interest rates are notably low for this option.
  • 504 loans: 504 loans are used to purchase machinery, land, building reconstruction, equipment, etc. A third-party lender gives you a down payment of around 50%, the SBA covers up to 40%, and your business covers the rest of the expense for the time being.
  • Microloans: Microloans are loans of smaller amounts, typically up to $50,000, made out to businesses with bad credit from nonprofits and the SBA collectively.

SBA funding options are often considered the best and most far-reaching. However, it would help if you had a relatively high credit score and could show a high monthly revenue stream to obtain funding most of the time.

Bank Loans

Banks offer many different types of loan options, each with separate qualifications and payback rates. From term loans to lines of credit, your local bank, or a national bank or international bank, offers whatever you need. Many larger banks also offer cash advances, equipment loans, invoice factoring, personal loans, invoice financing, microloans, and business credit cards.

Banks also can be some of the quickest sources of funding. You can get more favorable loan terms by building a relationship with a local bank through multiple loans or processing transactions through their services. Online banks also offer expedited funding services at the cost of a shorter-term period or higher interest rate.

Small-Business Grants

If you run a commercial business, applying for a small business grant may be your best option if you want to save. However, small business grants are competitive and take time to research and get into your bank account for spending. Here are the four primary sources you can obtain small business grants from:

  1. Federal Government: Offered through various government agencies for rural businesses, agricultural development, scientific research, and technological development.
  2. State and Local Government: Offered by the Pennsylvania Department of Community & Economic Development, the Benjamin Franklin Technology Partners of Southeastern Pennsylvania, and the Economic Development Agency.
  3. Corporations and Large Businesses: Corporate business grants are not the most common option for commercial businesses; however, many Fortune 500 companies offer grants through the philanthropic arm of their company.
  4. Nonprofits: Nonprofits support commercial businesses looking to make a change in the world. Businesses with diverse leaders or that employ a minority-majority staff or veterans are frequent recipients of nonprofit small business grants.

Many businesses that are not accepted for small businesses grants turn to crowdfund as a similar alternative. Crowdfunding campaigns are driven by donations from singular individuals who feel that your product or business is important. Donators do not want the money back for their contributions; however, many companies offer rewards to incentivize donations.

You Have Secured Financing | What is Next?

Whether it’s for shipping subscription boxes or any other needs, we want to ensure your business continues to flourish. It starts with providing you with financing options you may not know were out there. 

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