There are a number of financing options developed specifically for small businesses. But traditional loans, lines of credit, and credit cards may not always be the best options. Plus, newer businesses may not qualify, since you generally need to be in business for a set period of time in order to do so.

The good news is, there are various financing options available to new and existing businesses. Here are five.

1. Seller financing

If you’re buying a big-ticket item for your business, the seller may offer financing. This is most common with vehicles, real estate, and large equipment. You may be able to take advantage of sales incentives, such as 0% interest for a specified period or lower sticker prices.

2. Factoring (accounts receivable financing)

With factoring, you sell your accounts receivable (or the money people owe you but haven’t paid yet). The buyer gives you cash up front for a fee, usually calculated as a percentage of the total. This type of loan is intended to help with cash flow, since you aren’t really borrowing money so much as receiving an advance on the money you’re owed.

3. Crowdfunding (or peer lending)

There are a few forums that connect businesses with potential investors. Generally, you post what you need help funding — whether it’s a specific project or your business overall — and lenders can decide if they want to support you. Depending on the platform you use, this money may be offered as a grant, a loan, or somewhere in between (e.g., you may need to send investors a free product sample but not repay the funds). It’s interesting to note that while women are much less likely to receive venture funds from investors, they’re more successful when it comes to crowdfunding (a 70 percent success rate compared to men’s 61 percent).

4. Personal financing

It’s common for business owners to use their personal money, also known as self-funding or bootstrapping. And according to the most recent data from the OECD, women are more likely to self-fund than men. While this has certain perks (you’re likely to be strategic with your spending and don’t have to answer to investors), it can also be risky. Make sure you understand the terms — whether it’s credit card interest rates or the parameters on a home equity line of credit — since your personal financial health is on the line.

5. Grants and microloans

Consider applying for grants intended to help women business owners, or businesses in your industry or location. And, since grants are highly competitive, look into alternative lending options. For instance, the Community Development Financial Institutions Fund is a government-sponsored lending program aimed at helping businesses “in neighborhoods that lack access to financing.” The Small Business Administration also guarantees microloans issued through participating financial institutions.

For more ideas on how to finance your business, consider this guide to funding from the Small Business
Administration
. You can also make an appointment with a Wells Fargo banker to discuss your goals and the different options that may be available.

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