For most small business owners, there are already way too many things on their plate. There is payroll, employee issues, sales, marketing, and taking care of your existing clients. Often, it's very easy to just look past any kind of financing options that might be available to you. Small business finance is one of the most overlooked areas of a small business. Most of the time, business owners are concerned with just taking care of existing customers and employees that they don't take the time to learn about all the options that are out there to make their business run smoother. They often will opt for the path that is the quickest for them to pick and then move onto the next thing. Below is an outline of some of the more popular loan products that a small business usually runs across. If you are familiar with these, then you should be well on your way.

Most people are familiar with home equity lines of credit, and a business line of credit is pretty much the same thing. It's used to pay for short term expenses that are incurred by your business. So, for example, let's say your biggest customer hasn't paid you yet and you don't want to put too much pressure on them, but you really need to pay your employees this week. A great option would be to draw in the RLOC to make payroll for your company. This keeps both your customer happy because you are not hounding them for payment and your employees happy. After you've collected the funds from the customer, then you use the funds to repay the LOC. The idea is that you use the line to ease the pain of a short term cash crunch. Another typical use for the RLOC is when a certain supplier gives big breaks on purchasing inventory in bulk. Or if you can purchase offseason for big discounts and then store the inventory for yourself. This is the perfect situation where you would draw off the line of credit and take advantage of the steep discounts. When the time comes when you sell off the inventory than you pay back the line. Its a great way for business owners to be able to quickly act on great deals. The one thing you absolutely don't want to do is purchase a long term asset on the RLOC. A lot of small business owners fall into this trap. Really, the line must be used only for easing the pain of the short term cash crunch. By using a small business line of credit, You can greatly improve the cash flow situation in your business.

As companies grow, most owners realize that its silly to throw their money away in rent and it might be a good idea to invest their profits into a signifant asset. Purchasing your own building is a great way to invest in a long-term asset that will continue to pay dividends long after you've sold your business. When you're talking about the cost of the building, typicaly just getting a little better deal can make a huge difference. Banks will try to offer you the standard terms of 5 year fixed rates and 20 year amortization on your commercial mortgage, but with some negotiation you should be able to do better than that. As bank competition has increased and banks are buying market share, you should be able to get more aggressive terms than you were able to even 5 years ago. It is not uncommon to see fixed rates up to 10 years and amortization up to 25 years. There are even some government options where you can put less down than a bank will typically require. This is a great option if this is going hold onto the building for more than 10 years, because there are significant prepayment penalties. The way banks will price these loans is usually some kind of spread over the treasury. An example would be aon a ten-year note, you can generally guess that your loan would be priced at 2-2.75% over the 10 year treasury. Banks or lending institutions will always try to make their money somewhere and its typically in points and fees. It's not uncommon for them to ask for these things, but you can usually get out of paying them if you are a good enough customer and plan to bring enough business to the bank.

Small business startup loans are something that most business owners need at some point and also something that banks generally aren't too excited about. The most painless thing that you can do when you want to fund your startup is to either find some investors (like friends or family) or to gain access to funds by way of a Home Equity Line of Credit. The reason I say this is that banks have the process for HELOC loans down pat and it's generally pretty easy to get approved as long as you have equity. For startup loans, if you can show the bank some kind of track record or collateral then they will ask for your home as collateral anyways so you might as well go with the HELOC. You'll save yourself a lot of trouble and time going this route than trying to get the bank to buy into your business. Home equity loans typically have a lower rate, more flexible terms, and a quicker approval process. There is somewhat of a misconception about business credit and building up business credit. It comes as a surprise to most to hear that there is no such thing as building business credit. The only thing that a bank will look at when you request your first loan is your company's financial statements. So, a HELOC is a great option to get you off the ground right away and ready to go. It should be noted that this doesn't mean that you still don't do the necessary business projections and businesss plan. Those are important things that every business should use when planning their business.

Dealing with the bank can be a frustrating issue that you don't want to deal with, but it does make sense to educate yourself and the various products you have available to help grow your business. For something that's a little out of the box, there are also SBA loans that can assist you and give the bank the assurance it needs to make the loan. Borrowing shouldn't be something you are afraid of, it's the means to growing your business and taking it tto the next level.