Starting or even expanding an existing cleaning business can be expensive, especially when it comes to how to market a cleaning business. According to a recent survey by a group of Federal Reserve banks, 43 percent of small businesses seek external funds with 70 percent of small employer firms carrying outstanding debt.
When considering funding options, it is important for business owners to understand the different types of available loans available to small businesses to ensure they select the best possible option.
Term loans are also known as long-term loans, are best for business owners with great credit and require a lot of funding. They may not be a good option for new businesses as lenders often want to see a track record of success before taking on risk.
Short-term business loans provide fast cash for businesses looking to bridge cash flow gaps, address emergencies, pay off higher-interest debt or take advantage of new business opportunities. One advantage of this type of loan is that it does not require a great credit score. However, they often come with a relatively high APR compared to term loans.
Secured loans are ideal for businesses that want the lowest rates, have poor credit ratings, and seeking to repair their credit ratings. Small business loans are secured by some type of assets, such as a history of success, equipment, invoices, and inventory and purchase orders.
Equipment loans can be a great option for startups and established businesses, and they can be used to finance practically all types of business equipment, including vehicles.
Invoice financing is a type of short term loan that uses invoices as collateral. This loan type is only available to companies that rely on invoicing for payments and so is most commonly used by B2B businesses.
Purchase order financing
Purchase order financing can present a great lending opportunity for startup companies that receive a lot of orders but do not have the cash to fulfill them.