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How much does a liquor license cost?

So, you’re planning to get a liquor license. 

Whether you’re a preexisting restaurant looking to add alcohol to your menu or a new bar or liquor store preparing to open up, a liquor license can be costly, anywhere from $300 to $14,000 depending on the state.

However, the sale of liquor can be highly profitable as well, with larger profit margins than most goods.

With that said, applying and being approved for a liquor license takes some work.

That’s why in this guide, we’ll walk you through every you need to obtain an alcohol license, no matter which of the 50 states you’re applying for it in (as well as individual resources for each state).

As well as:

• How to get a liquor license in all 50 states
• Obstacles to getting a liquor license
• How to prepare your liquor license application
• And What to include with your liquor license application

First, let’s break down the basic steps necessary for obtaining a liquor license to elucidate the process: 

How to get a liquor license

Exactly what steps are required for you to get a liquor license depend on what state you’re operating in. 

However, the steps are largely the same, so here’s a quick overview to give you a better idea of what the process will look like:

1. Contact your state’s liquor board or governing body to determine what specific type of alcohol license you’ll need (most states have several different kinds)
2. Submit your application along with the necessary paperwork
3. Wait while your state’s ABC (Alcohol Beverage Control) board reviews your application (up to 6 months)
4. Upon approval, pay your license fee to activate your license
5. Renew your liquor license regularly, anywhere between annually to tri-annually depending on the state and license

Now that we’ve clarified the process, let’s talk a bit about some of the challenges involved in obtaining a liquor license. 

The Challenges of obtaining an alcohol license

While the process we laid out above is pretty straightforward, there are several potential challenges along the way that may come up.

Knowing what these challenges are in advance can help you either avoid or plan for them, making the whole process faster and more pain-free. 

The liquor business is highly regulated, as you might imagine. That’s where most of the challenges arise. 

For example, in some states, certain types of alcohol licenses are restricted, meaning only a certain number of businesses may hold that liquor license.

That means if there are no available spots, you may have to go fishing around for a business that is willing to sell their license to you, adding a layer of difficulty to obtaining your license. 

Another potential challenge is location-based. Some states have restrictions in place for offering liquor within a certain vicinity of schools. So, if you’re close to a nearby high school, you may need to consider another location or forgo the license altogether. 

In addition to this, because liquor licenses take up to 6 months for approval, if an issue arises in your application it could mean more delays and a very long wait to finally obtain your license.

These challenges aside, getting a liquor license is relatively straightforward, provided you know where to go to obtain information for obtaining a license in your state. 

How to Get a Liquor License in All 50 States

While obtaining a liquor license is a bit of a difficult process, it can prove to be worth the wait and effort for many businesses.

The only thing left to do at that point is to find out how to obtain a liquor license in your state. 

The National ABC Association state list and directory includes a list of all 17 participating states and can give you information about obtaining a liquor license, including liquor pricing and other details, if your state falls within their jurisdiction. 

However, for a complete directory of all 50 states, including where to find out more information about how to get an alcohol license in your state, click on the below map, dropdown, or see the text list below this with a summary of instructions for all 50 states: 

Or you can click the dropdown below to select your state:

Please selectAlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Here’s a summary of instructions for obtaining a liquor license in all 50 states:

How to get an Alabama liquor license

To get a liquor license in Alabama, complete a pre-application along with necessary checklist. Once that’s done, set up an appointment with Alabama’s ABC licensing office for your county. 

Price: $100 – $1,000 (Depending on the type of license)

How to get an Alaska liquor license 

To get a liquor license in Alaska, complete and notarize your liquor license application and display it at your place of business for 10 days before submitting you the Alaska ABC board.

Price: $50 – $2,500 (Depending on the type of license)

How to get an Arizona liquor license 

To get a liquor license in Arizona, review the types of licenses here then use the Arizona Department of Liquor portal to register for an account and submit your application. 

Price: $100 – $2,000 (Depending on the type of license)

How to get an Arkansas liquor license 

To get a liquor license in Arkansas, review the types of licenses with the Arkansas ABC, then mail your completed application to the Arkansas ABC office along with:

• Background check
• ABC seminar attendance proof
• And entertainment form

Price: $100 – $3,000 (Depending on the type of license)

How to get a California liquor license 

To get a liquor license in California, you can apply at the nearest California ABC office. 

How to get a Colorado liquor license 

To get a liquor license in Colorado, review steps with the Colorado Department of Revenue’s Liquor & Tobacco Enforcement website. They have a portal where you can submit your application, but you must first be approved at the local government level first (see link for instructions). 

How to get a Connecticut liquor license 

To get a liquor license in Connecticut, review the types of licenses and complete this application, then submit your application along with payment to a drop box at the Department of Consumer Protection Self-Service Center. 

Price: $60 – $2,750 (Depending on the type of license)

How to get a Delaware liquor license 

To get a liquor license in Delaware, apply using the OABCC’s (Office of Alcoholic Beverage Control Commissioner) online portal. 

How to get a Florida liquor license 

To get a liquor license in Florida, review the types of licenses here, fill out your application, then submit it along with supporting documentation and application fee to your local Alcohol, Beverage, & Tobacco Division office.

Price: $400 application fee

How to get a Georgia liquor license 

To get a liquor license in Georgia, you must obtain a local alcohol license, state alcohol license, and a Federal Basic Permit. First, apply for a local license with local government authorities, then apply for a state license here through the Georgia Tax Center portal. 

Price: $10 – $1,000 (Depending on the type of license)

How to get a Hawaii liquor license 

To get a liquor license in Hawaii, it all depends on what county your business sits in. For liquor licenses for the country of Honolulu, visit the Honolulu Liquor Commission to view the types of available licenses and submit your application. 

Price: $45 – $5,940 (Depending on the type of license)

How to get an Idaho liquor license 

To get a liquor license in Idaho, submit your application and documentation to the Idaho state ABC. Keep in mind that obtaining a liquor license in Idaho is known for being more difficult in many other states due to a heavily restricted quota system (which many states have, but is not nearly as strict). 

How to get an Illinois liquor license 

To get a liquor license in Illinois, visit the Liquor Control Commission’s portal for application and instructions. 

Price: $750 

How to get an Indiana liquor license 

To get a liquor license in Indiana, view the types of licenses and application instructions at the ATC (Indiana Alcohol and Tobacco Commission) online portal, where you can also submit your application. 

How to get an Iowa liquor license 

To get a liquor license in Iowa, use the State of Iowa Alcoholic Beverages Division online portal to view licenses, applications, and submit online. 

How to get a Kansas liquor license 

To get a liquor license in Kansas, use the Kansas Department of Revenue’s ABC department online portal to view licenses and apply online. 

How to get a Kentucky liquor license 

To get a liquor license in Kentucky, use the Kentucky ABC online portal to view licenses and application information (applications must be mailed or faxed). 

Price: $30 – $7,730 (Depending on the type of license)

How to get a Louisiana liquor license 

To get a liquor license in Louisiana, view the types of licenses here and submit an application. The Louisiana Office of Alcohol and Tobacco Control requires you display your intent to apply for a license in a local newspaper as well. 

Price: $320 for beer and liquor permit within a city

How to get a Maine liquor license 

To get a liquor license in Maine, follow these instructions from the Maine Bureau of Alcoholic Beverages & Lottery Operations.

How to get a Maryland liquor license 

To get a liquor license in Maryland, fill out the application here and follow these instructions at the Comptroller of Maryland’s website.

Price: $600 application fee

How to get a Massachusetts liquor license 

To get a liquor license in Massachusetts, complete an application plus a CORI (Criminal Offender Record Information) form. Whether you can apply online or not depends on what city you’re applying in. 

Price: $200 application fee

How to get a Michigan liquor license 

To get a liquor license in Michigan, download the license application at the Michigan Department of Licensing and Regulatory Affairs website here and review the instructions. 

Price: Up to $1,000

How to get a Minnesota liquor license 

To get a liquor license in Minnesota, start by contacting your local government for an application. Once you’ve been approved, you can submit your application to the Minnesota Department of Public Safety Alcohol and Gambling Enforcement. 

How to get a Mississippi liquor license 

To get a liquor license in Mississippi, complete this application then submit it to the Mississippi ABC office. 

Price: $45 – $9,025 (Depending on the type of license)

How to get a Missouri liquor license 

To get a liquor license in Missouri, complete this application and submit it to one of 3 labelled Alcohol and Tobacco Control offices depending on your location. 

Price: $300 application fee

How to get a Montana liquor license 

To get a liquor license in Montana, follow the Montana Department of Revenue’s online portal instructions. 

Price: $400 – $800 (Depending on the type of license) + $400 processing fee

How to get a Nebraska liquor license 

To get a liquor license in Nebraska, complete the Nebraska State liquor license application here and mail it to the Nebraska Liquor Control Commission.

Price: $400 application fee

How to get a Nevada liquor license 

To get a liquor license in Nevada, call your local county office that handles business licenses and complete an application here. Contact the Nevada Alcoholic Beverage Control if you have trouble locating the correct office. 

Price: $500 application fee

How to get a New Hampshire liquor license 

To get a liquor license in New Hampshire, fill out this form to request an application. Once you’ve received your application, follow these instructions depending on what type of license you need. 

Price: $100 filing fee

How to get a New Jersey liquor license 

To get a liquor license in New Jersey, contact your local ABC board for a copy of the application and review these application instructions. 

Price: $200 filing fee

How to get a New Mexico liquor license 

To get a liquor license in New Mexico, it is suggested you get in contact with liquor license broker as there are a limited number of liquor licenses in the state of NM due to a quota system. You can find more information here. 

Price: $200 application fee

How to get a New York liquor license 

To get a liquor license in New York, review the types of licenses here as well as instructions on how to apply. Fingerprint cards are required to apply and you must notify your municipality of your intent to apply for a liquor license by using a Standardized Notice Form. You can then submit your application after waiting 30 days.

How to get a North Carolina liquor license 

To get a liquor license in North Carolina, use their ABC online portal for all information related to license types and application submission. 

Price: $100 – $1,000 (Depending on the type of license)

How to get a North Dakota liquor license 

To get a liquor license in North Dakota, submit this application and use the key at the bottom of the document to determine the exact licensing fee, then send the application to the Office of the Attorney General. 

How to get an Ohio liquor license 

To get a liquor license in Ohio, review these steps provided by the Ohio state government. 

Price: Up to $2,344 + $100 processing fee 

How to get an Oklahoma liquor license 

To get a liquor license in Oklahoma, use the ABLE (Alcoholic Beverage Laws Enforcement) commission portal. 

Price: $55 application fee

How to get an Oregon liquor license 

To get a liquor license in Oregon, review the type of license you’ll need, then find the corresponding application here and follow the outlined instructions. The OLCC (Oregon Liquor Control Commission) will then give you a copy of your application to take to your local city government. 

How to get a Pennsylvania liquor license 

To get a liquor license in Pennsylvania, email ra-lblicensingmod@pa.gov to request an access code to the PLCB+ portal. Once you receive it, register through the portal system to get all the information you need. 

How to get a Rhode Island liquor license 

To get a liquor license in Rhode Island, use the state’s ELicensing portal. Register for a new account and you’ll be able to review the types of licenses and submit your application.

How to get a South Carolina liquor license 

To get a liquor license in South Carolina, review the types of licenses for SC then submit your application to the Department of Revenue. 

Price: $5 – $2,200 (Depending on the type of license) + $200 – $300 filing fee

How to get a South Dakota liquor license 

To get a liquor license in South Dakota, contact your county auditor for all basic information (you can find more information here). 

How to get a Tennessee liquor license 

To get a liquor license in Tennessee, review the TABC’s license type list. To get your application started, use the TABC’s RLPS portal or Regulatory Licensing and Permitting System.

How to get a Texas liquor license 

To get a liquor license in Texas, use the TABC portal to select the type of license and obtain the necessary application and instructions. 

How to get a Utah liquor license 

To get a liquor license in Utah, review the Utah ABC website for types of licenses and application information.

Price: Vary, up to $10,000 (Depending on the type of license)

How to get a Vermont liquor license 

To get a liquor license in Vermont, use the VDLC’s portal to review license types and get instructions for submitting your application. 

How to get a Virginia liquor license 

To get a liquor license in Virginia, review the Virginia ABC website’s 3 types of licenses and application details. You’ll be required to display notice of your application on your premises for 10 days and in a local paper for 2 days. 

Price: $195 for on-premise retail license application 

How to get a Washington liquor license 

To get a liquor license in Washington, visit the WSLCB (Washington State Liquor and Cannabis Board) website and follow the instructions. Washington is one of only a handful of states where you can submit your application online. Contact the Department of Revenue to request more information at 1-800-451-7985 or BLS@dor.wa.gov.

Price: $75 filing fee 

How to get a West Virginia liquor license 

To get a liquor license in West Virginia, review the types of licenses then submit your application by mail with fingerprint cards, bond fee, and a copy of your health permit to the West Virginia Alcohol Beverage Control Administration. Contact WV’s ABC office at 304.356.5500 or abcc.licensing@wv.gov. 

Price: $100 – $2,650 (Depending on the type of license) + $1,000 or $5,000 bond

How to get a Wisconsin liquor license 

To get a liquor license in Wisconsin, contact your basic city clerk for information (not much more information is given than that). Wisconsin’s Department of Revenue oversees licensing, so see here for more information. 

How to get a Wyoming liquor license 

To get a liquor license in Wyoming, use their Eliquor portal (one of the only states with such a service). Once you’ve registered, you’ll be emailed information and login details where you can review all necessary information and take next steps. 

How to prepare your liquor license application

Now that you have the basic information you need for obtaining a liquor license in your state, it’s time to prepare to submit your license application.

Before applying, it’s important to prepare all possible documentation you may need. Even if you’re not 100% sure what your state’s board will request of you, getting everything you could need prepared in advance will simplify the process and remove possible headaches.

Here are documents you should consider getting in order before filing your liquor license application:

Basic information:

•  Employer identification number

Licenses:

• Business license
• Music license (Only applicable if you’ll be playing copyrighted music)

Permits:

• Zoning permit
• Sales tax permit
• Alcohol tax permit 
• Food handler’s permit (Only applicable if you serve food)
• Building permit 
• Signage permit 
• Health permit 

You never know what might be requested of you when submitting your application, so getting everything together in advance, even the above items that you may not end up needing, to make sure nothing holds up your application.

What to include with your liquor license application 

Now, let’s review the required documents.

With your application ready to be submitted, you’ll need to make sure to send it off with everything required by your state’s liquor authority. 

What these documents or other requirements are will differ based on the state, but the license application should outline what these documents are.

If you’re unsure, make sure to call your state’s liquor authority to ask before submitting your application.

Here are additional requirements to keep an eye out for in addition to your state application: 

• Processing fee
• Signed lease agreement
• Estimated alcohol sales
• DBA or CoGS (Your state may require a Certificate of Good Standing from your Secretary of State if you’re a corporation. Alternatively, a DBA will usually suffice if you’re a sole proprietor or partnership)

If you submit your liquor license application without all the necessary documents, your application will likely be placed on hold until the documents are received.

Considering it can take up to 6 months for an unobstructed application, it’s important to make sure you have everything readily available so you don’t end up adding unnecessary time to that already long wait. 

What is the approval process like? 

Once you’ve submitted your license application, all that’s left to do is wait.

The approval process of each state is different, however, this is an overarching process that most states follow, more or less:

• Application is processed and delivered to relevant authorities for review
• Check for available licenses
• A background check is processed
• Authorities review the premises
• A public hearing is conducted in the case of complaints
• When everything is resolved, the application is accepted and the license issued within 4-8 months depending on the state and type of license

Provided everything goes well with your application, you’ll have your alcohol license within the next several months and be ready to start offering drinks at your business. 

Obtaining a liquor license can be time consuming and difficult, but the rewards can also far outweigh the difficulty it takes to get it, making it more than worth the effort. 

Running a business requires a continuous assessment of operations followed up by strategic and informed modifications. That’s just a fancy way of saying you need to know every aspect of your business to avoid surprises and to make necessary changes. There are several tools you can use to do this, one of them being the accounts receivable turnover ration. Despite the relatively long name, it is actually very easy to calculate and will give you some very useful insights about your business.  When reviewing your Accounts receivable aging report to forecast your cash flow its important to understand the account receivable ratio and find ways to improve it.

What is the accounts receivable turnover to be exact?

Very simply, the accounts receivable turnover is a ratio used to compare how well your business issues credit to its customers and how effective it is at collecting those debts. It is nearly impossible to run a business without issuing a credit to your customers, you probably do the same with your suppliers, but the idea is to make sure you collect that debt. Otherwise, your cash flow will suffer and running the business will become difficult.

The accounts receivable turnover thus helps you determine if your business is good at collecting debts from customers and if not, where to make some changes. Not only does this help your business operations, but will also be a factor when you’re ever applying for a business loan. Therefore, it is very important to know how you can calculate the ratio on your own and understand your business even better. 

How do you calculate the accounts receivable turnover ratio?

To find the ratio, you should use the formula:

net credit sales / average accounts receivable

The net credit sales section represents all revenue generated by the business as a result of sales made on credit by its customers. For that reason, the number should not include any revenue generated from cash sales. Also exempt from the value should also be sales returns and allowances. Sales returns and allowances are issued to customers due to problems with shipment, services or transactions, which is why they are not included in the net credit sales figure. 

You should be easily able to calculate the net credit sales from the balance sheet or income statement using this formula:

sales on credit – sales returns – sales allowances

Once you have the above figure, move on to the second part – average accounts receivable. This is the amount of money your business is owed by its customers. Values for accounts receivables should also be available from the balance sheet. The accounts receivable turnover is usually calculated over an annual period, so you should also find the average accounts receivable over a period of a year. To do so, add the accounts receivable numbers from the balance sheet at the start and at the end of the year, then divide it by 2 to find the average. You can use this formula:

(beginning accounts receivable + ending accounts receivable) / 2

With these two figures in hand, simply divide the two to find the final result using the formula shown above.

How about an example?

Although the formula is quite simple, it is always easier to understand through a hypothetical example. Consider a small business that manufactures car parts that had quite a good year with $1,500,000 in total revenue. Of this, $250,000 was comprised of cash sales while there was $50,000 in returns and $20,000 in allowances. The net credit sales would then be:

$1,500,000 – $250,000 – $50,000 – $20,000 = $1,180,000

At the start of the year, accounts receivable indicated $180,000 while the end of year value showed $240,000. Thus, average accounts receivable would be:

($180,000 + $240,000) / 2 = $210,000

Consequently, the company’s accounts receivable turnover would be:

$1,180,000 / $210,000 = 5.6

What does this Account Receivable Turnover number mean?

In the above example, a 5.6 accounts receivable turnover meant that the company turned over accounts receivable in 65 days throughout the year on average. If the value was, say, 11.2, it would mean that accounts receivables were turned over every 33 days or so. From this, you can tell that a higher accounts receivable turnover ratio means that a company is turning over its debt quicker and is more effective at collecting a debt. 

Having a poor accounts receivable turnover ratio is not advisable because it generally signals that the business is not collecting what it is owed. If such a situation were to continue for several years, then the company would eventually have to write it off as bad debt. That is money lost from the business, and the cash flow will take a hit and operations would become more difficult. In the worst-case scenario, the business would have to shut down because there wouldn’t be enough money to pay for essential services and staff. 

Because every business wants to have a high accounts receivable turnover ratio, it may be important to look at some of the factors that could affect the value. 

Quality of customers

Companies are always keen to find out about their customers’ credit rating in order to establish whether they are going to pay their debt and how quickly they do so. When a company does not pay attention to this factor, it ends up issuing credit to bad customers who delay payment or completely foregoing payment. In the end, your company swallows the cost and suffers a loss, which is why it is so important to understand the quality of customers you lend to. 

Debt collection

Even with an elite clientele, you will still need to put some effort in collecting what you are owed. Big companies have entire debt collection departments to ensure they are paid for the credit they extend. But even smaller companies can devise more effective ways of collecting debt rather than sit and wait. 

Dependence on cash

Those businesses that depend mainly on cash will always have better accounts receivable turnover than credit businesses. This is something to consider once you’re done making your calculations.

Now that you know what it takes, you can make the necessary steps to improving your company’s accounts receivable turnover. On the other hand, you should not aim for the maximum accounts receivable turnover ratio either. To achieve such a feat would mean being very aggressive with your debt collection and turning down any potential customer with slightly lower credit rating. Of course, this is not what you want, and business is all about taking risks, but it’s just a matter of understanding what your risk appetite is. 

Why is the  accounts receivable turnover ratio important to know for your business?

With the accounts receivable turnover ratio in hand, you will know how well your business is at collecting debt. Knowing this should direct you on how you can improve your debt collection policies, filter less desirable clients in the future or both. In the end, it is all about improving the cash flow of your business because that is absolutely crucial to its success and even existence. For instance, you may decide to cut back on some expenses for some time until the ratio goes higher to ensure you have enough cash flow to run the business. 

Besides debt, unsecured business loan providers also look at the accounts receivables as collateral instead of profit. By improving the accounts receivable turnover ratio, your business will be eligible for higher loans and at more favorable terms. 

To make this formula even more effective for your business, always keep tracking it so that you can make consistent changes whenever necessary for the company’s financial health. 

In this Guide we Explore Landscaping Equipment Funding Types

As a business owner, you are going to have a lot of different decisions to make on a day-to-day basis – with each and every one of them significantly informing how your business grows and whether or not you are able to make as much money with this operation as you’d like to.

Some of these decisions as a landscaping company are pretty simple and straightforward. Updating your website, buying new business cards, or rolling out new advertising and marketing campaigns are pretty much no-brainer decisions all smart and savvy business owners make.

Others, like whether or not you should buy, rent, or lease landscaping equipment – the landscaping equipment that allows you to have a business in the first place – are nowhere near as easy to decide on.

To better help you navigate the sometimes rough and rocky roller coaster of picking between which pieces of equipment you buy, which you rent, and which you lease out we have put together this quick guide.

Let’s dig right in!

So whats the difference between Buying, Renting and Leasing Landscaping Equipment?

For starters, it’s important to understand that there is a world of difference between buying, renting, and leasing landscaping equipment – even if the end result (your landscapers actually using the equipment) is identical.

On top of that, your business, your financial goals, and how you see your business growing over the next five or 10 years will significantly inform these decisions as well. You’ll really want to combat these decisions from a multi-angle and holistic kind of approach rather than just going with a short-term solution.

Buying Equipment

Buying landscaping equipment is never going to be an inexpensive proposition when it comes to cash flow – particularly if you are pretty much a seasonal operation that can count on three months (at least) of downtime or slow time where your equipment is just sort of sitting around costing you money rather than making you money and having to put up all the funding upfront taking away from the working capital reserved for your business operation.

Deals can be found on last years models, preowned equipment, and the like to be sure. But for the most part you are going to be ponying up a premium to get your hands on total ownership of this equipment, and most of the time that just isn’t a financially smart move to make – at least in the early stages of building a landscaping company, anyway.

Renting Equipment

Oftentimes confused with landscaping equipment leasing, the truth of the matter is landscaping equipment rental agreements are quite a bit different than a leasing program from top to bottom.

Rentals are almost always short-term in nature (we are talking about just a couple of days or at most a week or two), very expensive compared to leasing and even purchasing equipment, but may be ideal in certain situations.

For example, maybe you have a very specific project that requires very specialized equipment that you do not use all that frequently. In these circumstances renting equipment becomes a no-brainer decision – giving you access to the professional landscaping tools and equipment you need to get the job done without having to spend a mountain of money buying or leasing equipment you might not use again for quite a while.

Bottom line, renting landscaping equipment is a smart and savvy decision on an “as needed” kind of basis. Buying and leasing are much better options for the “bread and butter” tools you’ll use day in and day out.

Leasing Equipment

With how expensive landscaping equipment for sale can be (especially newer equipment) the overwhelming majority of landscaping operations choose to lease equipment before they even think about buying something.

Sure, you can find great deals on used landscaping equipment that might help cut down on the overall cost of ownership upfront. But even then you might be ponying up $50,000 or more for a piece of equipment that you could have leased for a few hundred or a few thousand dollars each month – letting you use that tool to make you money and essentially pay itself off along the way.

Another huge advantage in leasing commercial landscaping tools is that you’ll always have access to the latest and greatest tools and technology in the industry. Keeping a short lease allows you to consistently upgrade to the most efficient and professional landscaping equipment.

Landscaping companies that purchase their commercial lawn equipment out right may have brand-new toys for a couple of years. But as they continue to pay off those expensive loans their equipment gets older and older – and by the time they own their tools out right those machines are legacy tools that have been leapfrogged by more modern solutions.

With leasing, that’s never a problem. Your lease expires, the equipment is returned, and you lease new models with new advances, new technology, and ways of helping you make money more efficiently.

At the end of the day, the right business lending organization can help set you up with the kinds of financing packages you need to secure top-tier professional landscaping tools and equipment leases without having to deal with any headache or hassle whatsoever.

For most operations, this is the way to go!

6 Funding Methods to Think About When Raising Capital

Everyone loves a feel-good story. It’s hard not to smile when you see a video of a Make-a-Wish helping out a child, a story of an athlete who came from nothing, or one of those rags to riches stories like in The Pursuit of Happyness.

Scour the internet for more than 30 seconds and you’re bound to find plenty of stories about how people down in the dumps turned their lives around with a business idea. Or how a young entrepreneur took their hobby and made it into a million dollar business. You can just go ahead and skip the “Business Execs Hate Him! Click Here to Read About How one Man Become the World’s Most Successful Businessman Ever!” clickbait stories.

What you may find lacking in those stories is the amount of hours and hard work being mentioned. It usually comes at a blip in the story, like “Joe Smith worked 17 hour days” or “Katy Lee slept on her friend’s couch for one month”. Many may not realize the amount of work and sacrifice that goes into creating a successful business.

If you’re an entrepreneur, you are definitely aware of the amount of effort your job needs. You’ve sacrificed plenty to get here and there’s plenty more work to be done in order to take it up a notch.

One of the biggest hurdles for all entrepreneurs is funding. You have this great idea but you need cash. How can you expand your business into a new region? How can you market your product on a certain budget?

Below, we’re going to run through some proven funding methods that entrepreneurs can use to help grow their business and take it to the next level.

Alternative Lending

Our first item on the list is a bit of a broader term. It’s to sum up options that you would find outside a bank. It’s also a pretty new form of funding, becoming more and more common in the last decade. This is a way to  get fast business loans without the hassles of traditional funding

Alternative lending is primarily for small or medium sized businesses that failed to qualify for a bank loan. Many alternative lenders can get money to startups in a number of days and in some cases, hours.

You can either go in person or check out a variety of online lenders. Online lenders tend to be the fastest among all, checking all of your documents and giving you an answer within 24 hours. There are also more flexible and have various options.

They don’t come without their flaws, however, as you’re going to have a tough time securing a large amount. You’ll also have to pay back the amount you borrowed more frequently, with some even having daily repayment schedules.

Venture Capitalists

We’ve all heard the term, but may not know the exact definition. Venture capitalists are when an outside groups assumes part ownership in exchange for capital.

Many often turn to venture capitalists when they don’t have any physical collateral. Those who might be in this situation are those involved with e-commerce.

Photo source: https://beeketing.com/blog/future-ecommerce-2019/

Many e-commerce businesses operate as dropships, meaning they don’t ever actually handle the products being delivered but serve as a middle man between the producer and consumer. It’s likely that many small dropship e-commerce companies operate with nothing more than a handful of people on computers.

Venture capitalists will help inject money into the business and others will help provide other resources as well to stimulate growth. Those resources are often more helpful than the money.

Of course, many entrepreneurs may bristle at the idea of giving up even part ownership. It can be hard to let something go that you’ve worked so hard for.

Angel Investors

They used to be in the outfield, but now they’re helping you fund your business. Angel investors are often compared to venture capitalists, but angel investors tend to be a single investor instead of a company or group of people.

Instead of working with a company, you’re likely to be working with one single individual. Consider it to be a more personal direction than with venture capitalist. Once again, it might be hard to give up part of your company in exchange for some capital. Finding an angel investor is also going to be much more difficult than finding a venture capital firm.

Bootstrapping

Bootstrapping is when the business decides to fund itself. Chances are, you’re probably already a bootstrapper and you didn’t even realize it. This could be by gathering personal funds or injecting all your money made back into the business.

Bootstrapping is the “easiest” form of funding your business, because you’re not off looking for investors, venture capitalists, crowdfunding, or loans. No heading to the bank, endless meetings, or filling out tons of paperwork. The business is funding itself. It can be a tough line to walk, as you will still have to try to turn a profit while you’re putting money back into it.

The one downside to bootstrapping is that it’s quite slow. Even with a booming business like e-commerce, you’re not going to be making money hand over fist immediately. Many entrepreneurs use bootstrapping while searching for other areas of funding. Small tricks like finding a keyword rich domain and attracting forum traffic can make a huge impact early on.

Partner

Many entrepreneurs end up taking on a partner or partners when growing their business. Partners can help contribute capital, provide new contacts, take part of the workload, and provide an instant support system. It’s always good to have a foxhole buddy.

Finding a partner may be easy, but choosing the right partner can be tough. You’re going to be spending a lot of time together. Find someone that will not only be a good partner, but someone whom you enjoy being around.

Some entrepreneurs turn to other companies for partnerships, setting up a symbiotic relationship for their products and services.

Partners can provide a number of issues however, as there is always a chance for conflict, shared profits, and shared control. Remember to do your due diligence when looking for a partner. Your close friend might seem like a logical choice, but it’s like finding someone to live with.

Even though you may be best friends, they might be the messiest, loudest person on the face of the earth and drive you crazy.

The Personal Approach

Despite all of these official ways to go about funding your business, it turns out one of the more popular options is borrowing money from a friend or family member. Friends and family might also give you the loan interest free or simply ask for a small share of equity in the business. Every family is different, so how you approach this one is up to you.

If you have a niche product and solid following, you could turn to crowdfunding. There are plenty of stories of successful products that were birthed via crowdfunding. This is a tricky road to go down and is more likely to work with tangible products. But, it’s a 21st century trend that has exploded over the last decade.

It’s important for any business, whether big or small, to prioritize the safety of all employees in the workplace. Small businesses should especially take this seriously, considering that they are affected more severely compared to larger businesses, when accidents occur. Injuries sustained by workers can potentially increase insurance premiums, putting more pressure on the expenses of a company.

Methods like increasing the health budget can go a long way in ensuring that a business handles better in case of accidents. However, it’s more advisable that businesses try to prevent accidents in the first place, as that helps them avoid unnecessary hassles. Here are the best safety tips that can help you get more out of your small business:

1. Involve employees

Relying on externally-provided safety standards is a good thing to do as it can contribute to workplace safety, but it shouldn’t end there. At the end of the day, your employees are more conversant about the safety concerns of a workplace than anyone else. Keep in mind that they are working every day, and as such, they know what affects them. That’s why business owners should try to understand potential hazards by encouraging them to speak out. Besides, by doing so, you help to reduce work stress, and that too can contribute to workplace safety.

2. Give clear instructions

You may have heard of how employees will, at times, resort to unconventional methods such as winging it on their tasks when they don’t have enough information on what to do and how to do it. Such situations increase the chances of involvement in accidents, which is why small business owners should consider providing employees with clear workplace instructions.

3. Keep the workplace clean

A messy workplace increases operational risks, and that means less safety for employees. That’s why it’s vital to conduct regular safety inspections to ensure that the workspace condition is perfect for your employees. Boxes should be stacked up, and spills cleaned as quickly as possible, messy floors repaired, and such.

4. Review safety guidelines regularly

It’s normal for workplace environments to change from time to time, and this means that your safety guidelines should also be reviewed from time to time to cater for the changes. This is in consideration that workplace changes mostly involve things like introducing new equipment, bringing in new processes, hiring extra staff, and such.

5. Make good use of technology

To minimize workplace risks that may lead to injuries, business owners should consider using better methods of managing and investigating the root causes of various incidents. While most organizations go for spreadsheet-based systems for this purpose, a better solution would be to use Incident Management Software for better visibility and efficiency.

6. Maintain office machinery and equipment

Machines are never meant to last forever, and just like you will occasionally fall sick and require treatment, machines will also require frequent repairs to keep them working efficiently. Keep in mind that as machinery breaks down, it becomes less safe for workers. Besides, worn-out equipment can tempt employees to add their modifications to keep the machines working – that increases the operational risk even more.

7. Conduct risk assessment

This method goes a long way in reducing operational risk, hence lowering the chances of an accident. A cross-border risk assessment, for example, can be used in identifying risks in a unique way. This method is all about employees from different departments running each other’s audit for risk identification. That’s in consideration that a new set of eyes can see things differently, hence curbing risks early enough.

It’s the responsibility of every employer to protect their employees and ensure that they have a safe working space. The good thing with the tips discussed above is that they are easy to use even for small businesses. Besides, they go a long way in ensuring that you get the best out of your small business, as you won’t have to deal with avoidable accident cases.

In a perfect scenario, employees are cared for by their managers, motivation is through the roof, and productivity is evident throughout the company. But the sad reality is, most workers feel overworked and undervalued by their employer. A 2018 Gallup report found that only 34% of employees are engaged in their work, and as engagement is connected to productivity, this isn’t a very good number.

Moreover, in their quest for better employee productivity, some managers make mistakes that drastically reduce it instead. So where should you start? It’s important to remember that it’s not all about simply implementing policies or offering incentives, as your job involves understanding where your employees need help, too. A white paper on how to ‘Become a Pillar of Productivity’ by Special Counsel emphasizes the importance of conducting an evaluation of your team, including yourself, to see where exactly your inefficiencies lie. This way, you’re able to identify your specific productivity pain points and go from there. To give you an idea of some of the most common workplace productivity leaks from a managerial standpoint, here are four mistakes to look out for:

Not providing constructive criticism or feedback

Being granted the privilege of leading a team means having to know when to give constructive criticism to help them improve their work. Providing constructive criticism is one of our ‘4 Helpful Tips to Increase Employee Productivity’ because it lets them know what is expected of them, what they’re doing well, and what they could be doing better. Depending on the size of your team, check in once a week with your employees and remember to provide guidance wherever needed.

Not recognizing achievements

Along with regular feedback, you should also focus on providing a healthy dose of positive reinforcement. Having a balance of both makes employees feel appreciated and motivated to continue their work despite making mistakes. In fact, HR Daily Advisor report that 83% of employees find recognition more fulfilling than rewards or gifts, proving the profound impact of simply showing appreciation.

Recognition comes in many forms. Create an environment that enforces positive recognition by regularly pointing out small successes to build a habit within your team. You can also consider offering monetary rewards or mini gifts for a job well done.

Not engaging with your employees

Engaging with your employees about matters inside and away from the workplace makes them feel that you care about them. Give them an opportunity to voice out their concerns about workplace matters, whether it’s through anonymous or centralized methods. Remember to also check in on them regarding personal matters. Something as simple as remembering their anniversary or checking in on them when they’re sick will make them feel cared for. And you can go the extra mile by offering simple support methods such as giving them the day off or letting them work from home.

Not communicating clearly

A lack of clear communication can lead to misunderstandings that can cost thousands or even millions of dollars. Employees who are given tasks without a clear description of what is expected of them or how these fit in the bigger picture may simply do things the way they deem fit. Be a hands-on manager, explain how their work ties in with other projects, and clearly outline what you expect of them. This way, you ensure their success and yours, as well.

At the end of the day, it’s the simple things that can boost (or impair) employee productivity. A good leader who can set the foundations of a productive workplace by motivating, inspiring, and listening to employees while avoiding the pitfalls described above will reach their goals much faster.

One of the most important numbers you have to look at any time you’re considering making an investment in a company is the Ebitda. The abbreviation Ebitda stands for earnings before interest, tax, depreciation, and amortization. It is so important because it is a simple measure of a company’s financial performance. However, the Ebitda formula still has some limitations and not completely reliable. Find out how to calculate Ebitda, its benefits and limitations in this post today. 

What does Ebitda Mean?

As already mentioned, Ebitda refers to a company’s net income added to the interest, taxes, depreciation and amortization expenses. The Ebitda formula was first used and popularized in the mid-1980s by buyout investors who wanted to figure out if a company would be able to pay back their debt should it be refinanced. If the ratio of EBITDA to interest was too low, then they would know the company could not pay back its debt. 

Nowadays, investors use Ebitda to find out if well a company generates profit margins even before factors such as interest, depreciation, taxes, and amortization are considered. Through Ebitda, one company can also be compared to another one despite differences in size, and they can tell if the company can service current and future debts, just as the 1980s investors did.

How to calculate Ebitda

Some of the time, a company will provide the Ebitda number during its quarterly earnings report because so many investors have come to rely on it. Nevertheless, some companies will not do so, leaving you to calculate Ebitda on your own. That is because according to the generally accepted accounting principles (GAAP) in the US or International Financial Reporting Standards (IFRS), companies are not required to divulge the Ebitda. 

It is in these situations that knowing the Ebitda formula becomes so necessary. The good news is that it’s not too difficult to understand, which is partly why it is used by many investors. To work out Ebitda find the individual components from the company’s financial statements and then use this Ebitda formula:

EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization

or

EBITDA = Operating Profit + Depreciation expense + Amortization expense

Explaining Ebitda calculation

To really understand the meaning of Ebitda, you have to break it down into its individual components and then put them back together.

1. Interest

Different companies pay different amounts of interest depending on their capital structure. While there is technically no interest charged for equity capital, companies still prefer debt capital because it may be tax-deductible and less risky. Despite interest being an actual cost incurred by a company, the Ebitda formula adds it back to the income to eliminate differences in companies’ capital structures. This allows a fairer comparison between companies running different operations.

2. Taxes

Every company has to pay taxes according to the laws of the region it is located. Therefore, all companies have to pay taxes, although the tax rate will vary by region. Since taxes do not indicate anything about a company’s performance or the management’s expertise, it is added back to the net income to provide investors with a complete picture of financial performance. 

3. Depreciation and amortization

With time, a company’s assets will lose value due to wear and tear. Depreciation is thus calculated for tangible assets like buildings, while intangible assets like patents are amortized due to competitive protection. Both depreciation and amortization are calculated by non-absolute formulas and are thus added back to the net income through Ebitda calculations.

Calculating Ebitda example

The best way to understand Ebitda is by using a real-life example. On May 5, 2018, JC Penney posted income statements showing various financial figures but not the EBITDA. To do that, we shall use the above formula given that:

• net income = -$78 million (loss)
• interest rate = $78 million
• taxes = the taxes were added to the net income as a credit/benefit of $1 million
• depreciation/amortization = $141 million

Therefore, the Ebitda is:

(-$78) + $141 + $78 -$1 = $140 million Ebitda

What about Ebitda margin formula?

Whereas Ebitda is simply meant to show investors a company’s profitability before expenses, the Ebitda margin compares operating profit to revenue to find the operating profitability. To calculate the Ebitda margin, the total Ebitda is divided by the total revenue. When the Ebitda margin is high, it means that the company has low operating expenses compared to revenue and thus more profitable. 

In the above case of JC Penney, total revenue was $2.67 billion, equivalent to $2,671 million. Therefore, the Ebitda margin is:

$140 / $2,671 = 0.05

How Ebitda helps or hurts your business funding?

Just like in the 1980s, Ebitda is still used today when seeking business funding. To find out the value of a company, one needs to know that company’s cash flow. Ebitda values provide this metric, at least somewhat, because net income is added to interest, tax, depreciation and amortization expenses. In a way, therefore, it can be considered to be the company’s total cash flow for a period of time. That is why Gil Sadka, assistant professor of accounting at Columbia Business School in New York called Ebitda ‘a quasi-estimate of free cash flow’.

Being a non-GAAP figure, EBITDA can be tinkered with to provide a more attractive outlook for your company. In the above example, JC Penney could have hidden the fact that they experienced a net income loss for the quarter by announcing the Ebitda value. Of course, this is a good thing when you’re looking for funding from investors because you can present higher cash flow and receive more funding. This is not inherently cheating or lying, just highlighting the positives. 

It is also for this reason that financial experts are skeptical about the use of Ebitda. Investors such as Warren Buffett have been particularly vocal about their disdain for Ebitda because it completely ignores the cost of assets. That is why companies in financial trouble will be found trumpeting the Ebitda numbers to appease investors.

The simplest description of cash flow is the amount of money moving into and out of a business within a period but are you aware if you are carrying positive cash flow? For most businesses, cash flow is tracked during a month, but cash businesses may prefer daily or weekly options. When running a business, this is one of the most important metrics to keep an eye on because it dictates the financial performance of the business and perhaps even its survival. Therefore, you must consider this just as much as you think about profitability. 

What then is positive cash flow?

A business is considered to have positive cash flow when the money coming into the business is more than that going out. Money coming into the business is what you get paid for your products and services. At the same time, the money will be leaving the business in the form of bills, expenses like rent and salaries, possible loan repayments and even taxes. If the money coming in is more than that going out, that business is considered cash flow positive, and vice versa.

How does this compare to profitability?

Because this money is used to keep the business running, you have to maintain a balance in cash flow and lean toward being cash flow positive. But what’s tricky is that cash flow is very different from profit and this can sometimes trip you up. Consider the example of Tom who runs an online business selling hand-made apparel on their website.

Every month they buy raw materials worth $10,000 and spend another $5,000 on other expenses like rent, storage, shipping, etc.. In return, they make sales worth $20,000, leaving a profit of $5,000, which is pretty decent. By the end of January, some funds have still not been processed by the credit card company and some payments are still pending. When calculating for profit, though, these pending payments are counted as accounts receivable and factored in. However, for calculating cash flow, only completed payments are considered as money flowing into the business.

If, say, there is still $6,000 in pending payments, the cash flow in this situation would be negative – $14,000 in sales – ($10,000 + $5,000 in expenses) = -$1,000

To understand cash flow, it’s best to think about it as the difference in the balance of your business bank account between the end and start of the month; or a week, if that is your cash flow period. On the other hand,   gross profit is an accounting principle that works on an accrual basis. That is why profit is counted as soon as an invoice is sent to the customers, even if they are yet to pay. In the above example of Tom’s business, Tom’s business still made a $5,000 profit in January because profit was calculated as soon a product was shipped and a sale made. 

How to determine if you are cash flow positive

Looking at this example, you can see that a business can have negative cash flow and still claim to be in profit. Running a negative cash flow for one or two months is not uncommon due to delays, but keep doing it for several months and then you start having problems. Because cash flow is used to pay for expenses and raw materials, negative cash flow may stall your business. This is why whenever a business is in trouble, accountants and other finance professionals will focus more on the cash flow than the profitability to identify problems in the company. 

When you want to find out if your business has a positive cash flow, you need to create a cash flow report. The first entry to the report indicates all the cash you have in hand at the beginning of the month. In most cases, this is the balance on your business bank account. Check your bank statement for the balance left after your last transaction from the previous month. If you have multiple business accounts, make sure to include all of them to the first entry.

Now get to the body of the report that indicates the cash inflows and outflows. Cash inflows include all the cash received within that month from your customers while cash outflows include all the cash spent during that month. Since this is a cash flow report, only include actual cash transactions that happened that month. Going back to Tom’s example, if he sent an invoice for $1,000 in January but expects to be paid in February, this is not counted as a cash inflow in January. At the same time, if he paid for some expenses on the company credit card and doesn’t pay it back in January, this isn’t included in the cash outflow section either. 

In the end, you should have two columns with varying numbers and the difference determines if you are cash flow positive. Cash inflows are listed in the same column as the bank balance from the previous month, so add all these up. In the second column, add up all the expenses for the month. If the cash inflow is higher than the outflows, then your business is cash flow positive. 

How does positive cash flow affect your business?

By now you must already see the benefits of cash flow, and the most important one is to inform you about the financial health of your business. Even more important to your business is that you can use the findings to come up with a cash flow projection. Most business owners prepare for the future by working with a budget, which is just an estimate and guesswork of future income and expenses. However, cash flow projections are a lot more accurate and reliable, which can prepare you for the future even better. 

With positive cash flow, uncertainties about the future also disappear as you can predict future events. Consider a business that operates in a kind of cycle around the year with peak seasons at certain times of the year. Knowing this, you will know on which months you may need to order more raw materials in anticipation of higher demand. Therefore, you will be less likely to become overwhelmed by an increased number of orders in particular seasons. At the same time, you will be prepared for those seasons when cash inflow is low so that you can come up with cash for expenses. 

In the same way financial professionals value positive cash flow, so do creditors and lenders. When you go to ask for a line of credit or a loan from the bank, they will ask to see your cash flow report. This will show them how much money your business receives compared to how much is spent to determine if you have enough left to pay back the loan. Obviously, positive cash flow will lend you more credibility with lenders and you’re much more likely to get that loan, and at a more favorable rate. 

Finally, positive cash flow determines if your business is ready to grow and by how much. If you only focus on the profit, it may show you an attractive figure, but without the actual cash in hand, no advances can be made. But when you do know you have a certain amount of cash in hand, then you can plan for growth. In cases of negative cash flow, you will be informed earlier and plan how to cut your expenses until the cash flow shifts the other side.

What to remember about cash flow

The worst thing you can do is sit comfortably simply because you have a positive cash flow and secure for the future. Cash flow should be used as a tool for improvement, so constantly take time to make changes that favor your business in the long-term until you achieve your goals. 

While small businesses are the lifeblood of the global economy they definitely face their fair share of challenges, particularly when it comes to small business funding.

A lot of new entrepreneurs just aren’t used to handling this kind of cash flow, aren’t sure of how to cover taxes or payroll, and find wrangling with the intricacies of small business financing on a day-to-day basis – as well as big picture – to be a bit of an uphill challenge.

Sadly, oftentimes the small business funding problems cripple or even close businesses before they have a chance to get squared away.

According to the US Small Business Administration 30% of all businesses fail because they run out of money. Traditional lenders aren’t all that friendly to small businesses, either, only approving around 26.9% of all small business loans that are applied for.

Worse, 45% of all small business owners are unaware of the fact that they have a business credit score and aren’t taking advantage of funding options or packages that may be available to them.

To help you sort out your own funding and to hit the ground running with financing packages that makes sense for your business we’ve put together this quick guide.

Let’s dig right in!

Sneak Peak at the Top Funding Options for small business Available

For starters, it’s critical to know that you are going to have a whole host of funding options available to you as a small business owner – including options you may not have even known existed to begin with.

As a quick overview, these are just some of the funding solutions you might choose to leverage moving forward:

•           Traditional Loans

•           SBA Lending Packages

•           Business Lines of Credit

•           Business Credit Cards

•           Equipment Financing Options

•           Invoice Financing Packages

•           Short Term Loan Packages

Below we are going to go little deeper into everything that these financing solutions have to offer you as a smart and savvy this owner today.

Starting Your Search Right

The overwhelming majority of small business owners that seek out funding for their operation are going to do so when they “just feel like they need to” – which may or may not be the right move to make.

Obviously, as an entrepreneur with your finger on the pulse of your business you’ll have a good idea of when financing is needed. But there’s a lot of leverage in choosing the right financing packages for your business ahead of time (before you really need them) to make sure that you can capitalize on time sensitive or surprise opportunities.

Almost never too early to begin searching for financing options and getting all of your ducks in a row, so to speak.

Breaking Down Debt vs Equity Funding

While there are a myriad of small business funding and financing options available (as we highlighted above and will dive deeper into below), everything available kind of breaks down into two different groups – debt funding versus equity funding options.

Choosing the right solution for your needs is a big piece of the puzzle.

Debt Funding

Debt funding for your small business basically works the same way that traditional loans do, in that you take on debt to finance your operation – borrowing money and agreeing to repay it (plus interest) over a very specific block of time.

For the overwhelming majority of small business owners this is the right way to go. Debt funding options for small businesses are usually available for most kinds of businesses, entrepreneurs with average credit, and many of these options can even be taken advantage of online.

Equity Funding

Equity funding, on the other hand, is a way to boost your cash flow and get any injection of capital by selling off ownership of your company. You basically take on investors, give them a portion of your ownership (as well as some control), and in return you get the capital you need.

These kinds of options are not ideal for small business owners, particularly since the biggest and most influential investors in this line of work aren’t going to be looking to offer this kind of funding for anything they don’t see as a homerun hit potentially worth millions and millions of dollars.

You also give up a lot of control and a lot of ownership of your company and should you turn your business into something really big that can end up costing you millions (if not more).

Choosing Your Small Business Funding Options

Regardless of how you go about leveraging small business funding options, choosing the financing packages you pick for your business will come down to a variety of different factors.

These factors include (but aren’t limited to)

• Your industry and whether or not there is a predisposition to offering one kind of financing package or another to businesses in this industry
• The network that you have access to, particularly when it comes to connections with influential investors or lending institutions
• The specific amount of funding that you are looking to take advantage of to begin with
• The timeline that you are looking to receive funding on as well as the timeline you have for repayments
• The overall amount of control you want to keep exerting on your business, today, tomorrow, and years into the future

… And that’s just the tip of the iceberg.

You really need to think about how you want to proceed when it comes time to get small business funding, and you need to take both a short-term and a long-term approach before you jump right in.

This is often going to be a high stress and anxiety ridden decision to be sure, but or time and space you have – and the more options you consider – to make the right decision for your business the better off you are going to be.

Highlighting Debt Business Funding Options

Traditional Loans

Traditional small business loans are the easiest to understand, in that they are so similar to consumer style loan (car loans, personal loans, etc.) that the odds are pretty good that you’ve already taken advantage of similar lending packages in the past.

These kinds of low are great for business owners that want to maintain a lot of ownership, don’t want to give up any equity, and are looking to borrow money over a longer block of time but want to manage their monthly repayment schedule as well.

SBA Lending Packages

The US SBA is very friendly when it comes to offering small businesses long-term, low cost loans and financing packages – but the process of getting your hands on these lending packages can be a bit more involved than a lot of people realize at first.

Borrowers are going to need to have rock solid credit before they begin the application process, will have to have owned their business for at least a year already, and are actually going to have to go through traditional lenders to get the financing they are after – though the US SBA does guarantee these loans through the lender, which makes getting them a whole lot easier.

Anticipate a mile of paperwork to fill out before you get approval as well as a long and drawn out application process.

Business Lines of Credit

Business lines of credit are maybe the most versatile and flexible of all the different small business funding packages out there, giving you a lot of opportunity to use cash and capital to build and grow your business as you see fit without a lot of distractions on how you use that money.

Any business that has unpredictable or you regular cash flow, seasonal capital, or just want a lot of flexibility to do what they need to on a spontaneous basis – shifting gears when new opportunities arise or change – should look into these kinds of lending packages.

Business Credit Cards

There isn’t a lot of surprise to the way that business credit cards work.

You’re talking about the same kind of plastic you likely have in your pocket already, though the terms, limits, and interest rates are almost always going to be quite a bit different than the plastic you’re using in your personal life.

Business owners that do not need a pile of capital to work through when it comes to small business funding, do not need immediate access to giant reserves of cash, and are comfortable using faster to pay for business expenses and the like are really going to find these kinds of offers attractive.

It’s never a bad idea to look for business credit cards that offer some sort of reward system, either. With the kinds of dollar figures that run through these types of cards you can begin to rack up points and benefits in a hurry.

Equipment Financing Packages

Equipment financing packages are great for small businesses that have equipment on hand and other assets that can be leveraged for financing, helping you to purchase the equipment and materials you need to upgrade or overhaul your business while securing loans through the assets you already have on hand.

Kinds of financing packages for businesses can be a little bit restrictive in how they are used, however. You’ll need to drill down into the ins and outs of your specific arrangements before you pull the trigger on this kind of move.

Different offers will have different restrictions attached to them so be sure that you are really sure of what you’re getting into the for you sign on the dotted line.

Invoice Financing Packages

One of the biggest challenges you’ll have as a small business owner is waiting around for your clients to actually pay you after they have been invoiced – a challenge that every small business on the planet is going to have to wrestle with far more often than they’d like.

Invoice financing small business funding packages can help you leverage those unpaid invoices to get cash and capital that you need ASAP, using the actual invoices themselves as collateral and getting in advance on those invoices to keep your cash flow a lot more consistent.

One of the big benefits here is that any business with invoices can take advantage of these kinds of lending packages regardless of their credit score, credit history, or overall credit worthiness. The invoices themselves are more than enough to get the ball rolling, giving you an opportunity to use financing packages even if you thought traditional opportunities were closed off.

Short Term Loan Packages

If you are on the hunt for cash and capital quickly you can expect to pay a premium to take advantage of these kinds of lending services.

Short-term loans kind of sit in that sweet spot between speed and overall cost, giving small business owners an opportunity to get their hands on the money they need when they need it most without having to mortgage their future financial situations along the way.

These kinds of loans are very flexible, offer almost instant payouts, and are usually pretty affordable – basically acting like a condensed down version of more traditional term loan packages like the ones we made mention of earlier.

Getting Creative with Your Funding Options

Creative small business funding options are available as well and you shouldn’t overlook them, even if they don’t appear to be quite as “old-school” as more traditional lending services we’ve already discussed.

Small business funding grants are a great way to get a lot of cash and capital you wouldn’t have had access to otherwise, but you’ll need to set aside plenty of time to apply for them and go through the entire (often grueling) grant process to land the capital they provide.

Crowdfunding solutions are becoming really viable these days, already one of the most popular channels for small business funding for startups and new entrepreneurs that are tech savvy. This is another approach you might want to go down if you’re willing to take on the risk that it entails.

Finally, you can always reach out to your personal network (your friends and family members) that may be willing to help you make your entrepreneurial dreams come true.

It can be a bit risky to mix business and family or other important relationships, but plenty of people have been able to make it work – and have credited these kinds of lending services with allowing them to make their financial future a reality.

Closing Thoughts

At the end of the day, there’s no simple formula for calculating exactly how you should approach small business funding for your specific needs.

You’ll instead have to really assess where you are as a business, what your cash flow situation is, the needs you have to take care of with this financing, and the flexibility of not only how you can use the funding but how you can go about repaying the loans moving forward.

Hopefully we’ve been able to shine a little bit of light on the best small business funding options available today and have helped you make the right choices for your business going forward!