12 Financing Options for Growing Your Business | SunTrust Resource Center

Grow Your Business

12 Financing Options for Growing Your Business

12 Financing Options for Growing Your Business

When it comes time to expand your business, there are a variety of financing options to consider:


1. Traditional Loans

Loans and lines of credit from banks on standard terms

  • Larger loans
  • Favorable terms for bankable businesses

  • Not an option for start-up businesses
  • Credit terms

2. Self-funding

Financing the business from personal savings

or investments

  • Available to owners with savings and cash flow

  • Limited by personal assets and savings
  • Potential risk to retirement/savings

3. Friends and Family

Loans from individual’s friends and family

  • Prebankable option
  • Offer the possibility of favorable terms

  • Risk to personal relationships
  • Control and management can become issues

4. Vendor Credit

Leverages supplier payment terms financing and discounts

  • Inexpensive credit option
  • Good source of working capital

  • Limited by business scale and supplier credit

5. Credit Cards or LOC

Personally secured business

credit cards/lines finances

inventory and working capital

  • Available to owners with credit and assets
  • Prebankable option

  • Relatively expensive
  • Variable terms

6. Equity Investors (VC/ Angel)

Selling part of the company in exchange for growth capital

  • Growth capital for fast-growth companies
  • Governance and advice

  • Not an option for start-up companies
  • Not a loan
  • Give up future profits and control

7. Receivables Factoring

Sells receivables to commercial

finance company at a discount

  • Provides cash and reduces collections risk

  • Relatively expensive
  • Limited by volume/ customer creditworthiness

8. SBA Loans

Loans from banks guaranteed

by the government, often with

more favorable terms and

underwriting criteria

  • Flexible terms
  • Start-up option
  • Relatively large loan amounts
  • Variety of types

  • Need clear documentation
  • Requires motivated and experienced banker

9. Leasing

Reduces payments for capital

equipment/vehicles with lease

vs. purchase

  • Lower payments and improved cash flow

  • Generally higher cost of capital

10. Microlending

Smaller loans with more flexible

terms, underwritten by SBA and

bank pools; delivered by

community-based companies

  • Start-up option
  • Coaching/ technical assistance

  • Relatively small loans
  • Non-bank loans

11. Government Programs

Lending programs offered on

federal or state level such as the


  • Flexible terms
  • Wide variety of options

  • Availability varies by region

12. Grants

Public policy cash grant awards

  • Do not have to be repaid

  • Limited to specialized fields

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