Thirteen Small Business Financing Options For Today’s Economy

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Has anyone else noticed that the media has a fixation on where you can’t get financing?

I regularly answer questions on the LinkedIn Answers forum and’s answers forum and as one might expect there has been a constant stream of questions from business owners asking where to turn for business financing. Being a financing company, we are hyper-aware of the continuing negativity by the mainstream media which continues to focus on “where you can’t get financing”. So, as part of our refusal to participate in the recession we’ve compiled a list of financing options that are still out there (in no particular order).

There are probably more than you think.

Bank loans

Yes, there are banks that still lend money, though you definitely have to search harder to find one and pay extra close attention to the terms. Many banks have limited their liability via more bank-friendly terms to dig themselves out of their unhealthy balance sheets.

Small Business Administration

The SBA has several programs aimed at helping small businesses access capital.  There is typically more paper required to get approved for these loans, but the SBA is doing what it can to get capital to businesses that need it.

Equipment lease

This is of course our specialty and we still have competitors who also work to provide businesses with capital to purchase commercial equipment..  With our recent expanded lease capability of $250 million we definitely have money to help out small businesses.

Short term business loan

To get access to a bank loan these days your personal credit score typically needs to be north of 700.  This credit score minimum has increased significantly over the past 2 years.  There are a lot of business owners who still have strong cash flow but don’t meet this elusive requirement. Short term loans of 6 – 12 months can accommodate credit scores in the low 600’s. A great option for many businesses.


This form of financing has been around for a long, long time and under-utilized in my opinion.  Factoring allows you to turn your outstanding invoices into cash today.  When business is good, but cash flow is suffering because you are waiting 30 – 90 days for your customers to pay you, check out this option.

Collateral financing

If you have lien-free hard assets that have some value, there are programs available that will provide cash based on the appraised value of that equipment.

Asset liquidation

With the decline in business in the past several years, you may have equipment that is sitting unused. Turn this asset into cash by selling it.  Direct Capital can assist through our consignment program or if you choose to do it on your own, increase the attractiveness of your sale by offering financing through eBay.

401k or Retirement Assets

Depending on how your retirement savings have fared over the past several years, this asset may be worth investigating.  Check with your tax professional on whether or not this is a viable alternative for your situation.

Home (or other real estate) equity

Try not to laugh at this one!  The home values have been crushed for most of us across the country but the market will eventually rebound and equity will again rise.  There are (hopefully obvious) risks with putting your home up as  collateral for your business so do some serious analysis before going this route.

Your Vendors

Your vendors have a vested interest in seeing you succeed. The more business you do, the more you’ll need to buy from them.  Position it correctly as a win-win for you and your vendor and their willingness to help may surprise you.

Credit cards

Most of you are probably all to familiar with this option. If you already have one, it’s quick and easy. But, make sure you investigate the alternatives and read your card agreement carefully before jumping on this one.

Friends and family

Many times this group of people knows how passionate you are about your business venture and that passion can be contagious. Don’t assume your friends and family won’t want to help out.

Help your fellow business owners out – am I missing any? Share your ideas in the comments below.

Looking to buy off-lease or repossessed equipment?

Off-lease and repossessed equipment

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  1. There are two concerns foremost in the minds of most business owners today. One deals with how to grow revenue under today’s conditions. The other is how to access capital. You have dealt with the second. You mentioned most of the options. Although the site I publish is intended to help owners sell their businesses, many have other things on their minds today, including accessing capital. For one option not covered see .

  2. Thanks for the info Martin. I can imagine that many business owners who have considered selling are frustrated by what must be reduced valuations as a result of the recession.

  3. Great post. You really outline some good options here for business owners. The bottom line is this – if you believe in yourself and your business – then find a way to make it work. If these options don’t work for you – try something else. There are as many ways to finance a business as their are businesses – in today’s economy, you just have to get creative.

  4. Options like Merchant Cash Advance, SBA are really helpful for small or booming businesses which don’t get much assistance from other financial institutions.

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