Our "quick pick" chart of suggested financing options is loosely arranged according to the general age of a business and whether the financing is for long-term or short-term needs. Just find your profile in the chart, and click on one of the options to read more about it. However, keep in mind that our arrangement of financing options merely reflects how each option is often used, not how the option is always used. Most of these types of financing may be used, under certain circumstances and in certain businesses, throughout the life cycle of a business.

 

Startup Business
Primary Sources
Long-term financing	Short-term financing
Personal financing Insider (family/friends) financing Angels Equity financing Leasing Credit unions SBA LowDoc	Personal financing Insider financing Credit cards Credit unions Trade credit Banks SBA Microloans SBA LowDoc
Secondary Sources
Long-term financing	Short-term financing
Business alliances SBA regular 7(a) program Venture capital SBICs State and local public financing Franchising Asset-based financing	SBA CAPlines Consumer finance companies Commercial finance companies State and local public financing
Growing/Mature Business
Primary Sources
Long-term financing	Short-term financing
Debt financing Equity financing Bank lending (secured and unsecured) Leasing Business alliances Venture capital (and SBIC) Limited private offerings SBA Section 7(a)	Debt financing Asset-based financing Bank lending (lines of credit, short-term commercial loans) Trade credit Factoring Commercial finance companies
Secondary Sources
Long-term financing	Short-term financing
Initial public offerings Franchising Angels SBA Section 504 (Community Development Companies) Insurance companies Commercial finance companies ESOPs SBA International Loan Program	SBA CAPlines State and local public financing SBA Export Working Capital Loan Guarantee Program

One of the most important points for entrepreneurs to remember is that there is no cookbook recipe to follow for obtaining small business financing. A chart that helps you identify certain traits about your small business can give you some guidance as to the types of financing you can realistically expect to obtain, but attempting to slot your business into a rigid financing "profile" can limit your own creative thinking as well as the impression you give to potential financiers.

Your task is to present the most attractive overall portrait of your particular business by emphasizing its strong points and explaining its weaker traits. One business may have an extremely valuable asset, e.g., a technology patent, but no track record; another business may have a sizable initial equity investment but lack short-term cash. With small businesses, the risk to investors and creditors is so high that each financial trait is exaggerated, and any shortcomings must be balanced by a compensating advantage. You need to be flexible in considering how the strengths and weaknesses of your business can be presented so that you can have access to as many different sources of financing as possible.

Throughout this module, encouragement is given to finding lenders or investors who will take the time and effort to consider the unique characteristics of your small business and who may eventually view that business as a one-of-a-kind opportunity.