Small Business Funding Options Are Plentiful When You Know Where to Look

While most business owners use their own cash or savings to initially fund their startup operations, at some point many of them may need an injection of additional capital from an outside source. With more financing options becoming available to small-business owners seemingly every day, the lending landscape is constantly evolving.

In recent years, non-bank online lenders have entered this landscape adding more choices, making it as important as ever for business owners to closely evaluate what each lender offers, including the pricing, rates and terms of their products. We know that more and more business owners and entrepreneurs are seeking help in reviewing the many factors to consider as they shop for loans.

When it comes to finding the right financing for your small business, here are four of the top things to consider as you evaluate lenders:

Comprehensive small business offerings.

When you’re looking for funding, it’s important to thoroughly research and assess your options. It’s helpful to look for resources that will help you prioritize those lenders who provide a full array of small business offerings. For example, Wells Fargo recently introduced Wells Fargo Works for Small Business -- a broad initiative to deliver resources, guidance and services for small-business owners. Within the site, business owners can review articles on building credit, watch videos on cash flow and even prepare a business plan through a free step-by-step Business Plan Tool. Every small business can benefit from more comprehensive support to achieve financial success.

Speed and convenience.

Of course, many small-business owners are strapped for time and are seeking faster, more convenient online lending options at competitive interest rates. With Wells Fargo’s new FastFlex? Small Business Loan, a business owner can complete an application in minutes, receive a quick decision after applying and obtain funding in as little as one day. Other credit products will require more time -- such as real-estate secured loans -- to gather necessary documentation. While numerous factors can impact the length of time for a small business loan approval, the best lenders make it as easy as possible, by keeping customers informed throughout the process.

To make the application process as quick as possible, it is important that you take steps before applying for a business loan to make sure your business and personal credit reports and credit scores best reflect your financial history. Always make debt payments on time, manage your credit usage responsibly and frequently check your credit reports for accuracy. While applying online can speed up the application and approval process, it’s still important to make sure you and your business are credit-worthy when the time comes to apply.

Transparent fees and rates.

Interest rates, fees and loan terms vary by lender and product, so it’s important to compare all of your options before picking one. Borrowers should look for a loan product that clearly states its terms and pricing upfront. Take time to fully understand how much the loan will cost, frequency of payments and any additional fees associated with the loan. As you pursue credit for your business, make sure lenders provide you the interest rate as well as how much you will owe each payment period. Compare all of your options to help ensure you’re getting the best product to meet your financial needs.

History of serving small businesses.

It’s a competitive market for small business loans, and that’s good for small-business owners. When choosing a lender, you should consider financial institutions that have demonstrated a commitment to and track record of working with small-business owners. What’s more, make sure the lender has a team that’s focused on helping small-business owners at every stage -- from getting credit-ready to managing credit. Does your lender have bankers who you can contact online, by phone and in person to answer questions and provide financial guidance? Easy contact can demonstrate the lender is focused on more than booking loans -- it shows their commitment to serving and helping small businesses. A knowledgeable banker also can help you identify the type of business credit that’s appropriate for your business and its specific needs.

For business owners seeking funding to start or expand a business, or who need capital to address cash flow issues, the choices are plentiful. Before applying, it’s important that you take the time early on to research and assess all small business funding options so you can determine what type of loan is best for your business.