As businesses seek to expand and stay competitive in today’s fast-paced market, securing the right financial products is critical to fuel growth. Whether you need funding for operational expansion, new equipment, or working capital, the financial landscape offers a variety of solutions designed to meet your business needs. In this blog, we’ll explore the top five financial products that helped businesses thrive in 2021 and remain relevant for companies looking to grow.
1. Business Term Loans
What is it?
A business term loan provides a lump sum of capital upfront, which you repay over a set period, usually with fixed monthly payments and interest.
Why it’s great for growing businesses:
Term loans are ideal for businesses looking to fund significant investments such as equipment purchases, hiring new staff, or expanding operations. With flexible terms and competitive rates, this is one of the most common and reliable forms of financing for growing businesses.
2021 Trends:
In 2021, many businesses took advantage of term loans to adapt to pandemic-related changes, such as digitization, moving operations online, or expanding e-commerce capabilities.
2. Business Lines of Credit
What is it?
A business line of credit gives you access to a pool of funds that you can draw from as needed, making it a flexible option for managing cash flow and unexpected expenses. You only pay interest on the amount you use.
Why it’s great for growing businesses:
Business lines of credit offer flexibility and control, making them perfect for managing working capital and handling fluctuating cash flow needs. Whether it’s paying suppliers or covering seasonal dips in revenue, a line of credit gives businesses the breathing room they need to operate smoothly.
2021 Trends:
With economic uncertainty during 2021, business lines of credit were a popular option as companies sought flexible financing without taking on excessive debt.
3. Equipment Financing
What is it?
Equipment financing allows businesses to finance the purchase of machinery, vehicles, or other equipment essential to their operations. Typically, the equipment itself acts as collateral for the loan.
Why it’s great for growing businesses:
For businesses that need to upgrade or acquire new equipment to scale their operations, equipment financing is an affordable way to spread out the cost. This option helps conserve working capital while still investing in essential tools for growth.
2021 Trends:
As industries like construction, manufacturing, and technology saw increased demand, equipment financing became a key resource for companies needing to expand capacity.
4. Invoice Financing (Factoring)
What is it?
Invoice financing, also known as factoring, allows businesses to borrow against their outstanding invoices. The lender advances a percentage of the invoice’s value upfront, helping businesses maintain cash flow while waiting for clients to pay.
Why it’s great for growing businesses:
Invoice financing is an excellent solution for businesses that experience long payment cycles but need cash to keep operations running. By unlocking cash tied up in unpaid invoices, companies can continue to grow without the delays caused by slow-paying customers.
2021 Trends:
Many businesses struggling with extended payment terms from clients in 2021 turned to invoice financing to improve cash flow and keep growth plans on track.
5. Merchant Cash Advances (MCA)
What is it?
A merchant cash advance provides businesses with a lump sum of cash in exchange for a percentage of future credit card sales. Repayment is typically tied to daily credit card transactions.
Why it’s great for growing businesses:
MCAs are an excellent option for businesses with high credit card sales, such as retail or hospitality. They provide fast funding with flexible repayment terms based on sales volume, meaning you pay more when business is good and less during slower periods.
2021 Trends:
With the ongoing recovery from pandemic restrictions, many businesses in retail and hospitality turned to MCAs for quick funding to restock inventory or prepare for reopening.
How NBS Financing Broker EST Can Help You Secure the Right Financial Product
Choosing the right financial product is essential for ensuring the long-term success of your business. At NBS Financing Broker EST, we specialize in connecting growing businesses with tailored financing solutions that fit their specific needs. Whether you’re looking for a term loan, line of credit, or invoice financing, our experienced team can guide you through the process and help you secure the best product for your goals.