1. Lendio is the best business loan company for most businesses. That’s because Lendio is more like a loan matchmaker than a lender—which is great news for you. All you have to do is fill out a 15-minute online application, then Lendio will use your application to match you with the right loans and lenders for your business.
2. Bank loans are the best source of funding if you qualify. They are the second most popular source of loans for small businesses, after retained earnings. They have the lowest interest rates since they use depositors' funds to make the loans. Your local community bank or credit union offer the best rates.
3. The Top 5 Sources For Small Business Loans. The Hartford Contributor Brand Contributor. So, where's the best place to get a small business loan? The answer can take many forms.

The 5 Best Sources For Business Loans Personal Loans

Thousands of small businesses open their doors for the first time each year, but most of them will close doors again within five years. Those that do close usually do so because their owners failed to secure enough capital to finance the business. Sometimes this happens because they simply didn’t know where to go for funding. This doesn’t have to happen to your small business.

Use Your Own Money

Why Banks Are No Longer the Best Choice for Small Business Loans There is no doubt that traditional banks are just not lending to small businesses with under $5 million in yearly sales. Most people think that this is a new phenomena but it has really been the case for decades. For example, if you have a 500 credit score, you may be ineligible for traditional small-business loans and need to consider alternative small-business funding sources. Some bad credit business lenders offer term loans, lines of credit, invoice financing and merchant cash advances.

The 5 Best Sources For Business Loans Guaranteed

The best way to finance your business is with your own money. Consider dipping into your savings account, taking out a home equity line of credit or cashing in against stocks, bonds or mutual funds. Exercise caution when using your own money. Never put yourself or your family into an unsafe financial situation for the purpose of opening a business. If the business goes under, so will your personal finances if you aren’t careful. This includes using credit cards to finance your business. If the spending gets out of control or the company doesn’t become profitable, you will end up with large credit card bills that you might not be able to pay, leading to poor personal credit.

Ask Family and Friends

Few people like asking for loans from friends or family members, but if you know of someone who has the money to invest and would be interested in your idea, it is worth considering. They probably won’t charge you interest, which means you’ll save money when it comes time to pay back the loan. You might also consider bringing a family member or friend on as a partner so they know they will get a return on their investment if the business does become successful.

Traditional Business Loans

Banks are the most common places small business owners go for financing, but they can also be the hardest places to secure funding from. If you go this route, be sure you have a very clear and executable idea. Bring a solid business plan with you and be sure it includes a break-even analysis that estimates your company’s financial obligations and expected revenue to show its potential for profitability. Be able to prove that you’ve researched the costs. Even with a solid business plan, banks often hesitate to fund startups because they prefer to finance businesses that have already proven they make money. However, if you have the ability to put up personal assets as collateral or if you have someone who will co-sign with you, you are more likely to be approved. Alternatively, you could check out the Small Business Association or similar local organizations that offer lending options.

Private Investors

You may be able to find a private individual, company or organization that is interested in your idea and wants to invest in your business. While this works for some, it is important to know that many of these types of investors will expect to be part of the company’s daily operations and decisions, requiring you to compromise about how to run your business. Investors are usually interested in ideas that they expect will have a high return on investment (ROI). This is a good route if your company is tech-related.

Leasing Companies

One way to save money and secure what you need for your business is by leasing your equipment. Leasing companies often provide electronic equipment, such as computers, phones and other office equipment. You can even lease cars if you need to. While this means you pay a monthly bill and purchase your equipment over time, it saves you from spending thousands of dollars to buy outright without knowing if your company will succeed.

There are many ways to secure financing for your small business, especially if you are willing to think outside the box. A solid business plan, knowledge of your industry and an enthusiastic attitude is likely to help no matter where you choose to secure your capital.

Legal Disclaimer

The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.