Small Business Financing Options

investments-1148457-mAs you grow your business, its important to be able to have financing options that you can use to take your business to the next level. In this episode of Bernard Roesch shares some of the financing options available for small businesses that you may not be aware of.

If you have any questions about this podcast episode, please feel free to contact us.



* Note that this blog post is derived from the transcript of the audio discussion. Please excuse any typos or odd wording.

As a small business owner, you might be aware of some of the typical financing options but the post below talks about some of the financing options available for small businesses that you may not already know.

Capital Leasing Is A Viable Financing Option

You may need financing to grow your business at a certain point. Buying equipment is something that can help your business; stocking up on inventory ahead of busy season is an advantage for you. And so, there are different situations where financing can help you build that bridge and grow your business.

Bernard mentioned that the options for financing really depend on the type of asset that you’re trying to finance. But some specific options that he mentioned for financing that you may not already be aware of is; number one: capital lease.

  • Basically, what you can do with a capital lease is combine multiple different purchases from multiple different vendors such as software and equipment and a number of other things, and
  • You can combine all of that into a single lease with a capital leasing company. So, that’s definitely something to consider.

One of the things Bernard mentioned about capital leasing in particular is that;

  • You should still negotiate strongly with the vendor that you’re purchasing from, to make sure that you get a good price on what you are actually buying, even though the leasing part makes it easier for you.
  • Keep in mind with capital leasing, the interest rate may be higher than some other options.
  • It may be as high as 20%, so that’s definitely something to consider if you’re looking at this option.

Get Credit Based On Your Business’s Accounts Receivable

Another option that Bernard talked about is accounts receivable.

  • If you have strong accounts receivable in your business, then that’s something that you can leverage to actually get financing for your company.
  • One option related to accounts receivable is going to a bank and basically getting a loan based on that accounts receivable. And so,
  • The bank’s essentially going to look and see that you have a fair amount of accounts receivable in place. And
  • They may extend you a line of credit based on that accounts receivable.

They will also review that accounts receivable every now and then to make sure that it is staying at a healthy level based on that line that they’ve extended to you. So, that’s one informal option related to accounts receivable.

Factoring of Accounts Receivable – A More Formal Financing Arrangement

A more formal option that Bernard mentioned related to accounts receivable financing is what is called “factoring of accounts receivable.” And essentially what that is, is;

  • When a company that specializes in providing financing based on accounts receivable will come in,
  • They will review the accounts receivable that you have outstanding, analyze your clients; and then
  • Basically extend you financing based on that accounts receivable.

So, it’s a much more formal arrangement but definitely something to be aware of.

Prepare Yourself In Advance For Financing

To conclude, one of the things that Bernard shared today relates to some of the other episodes that he’s put out in the past and that is preparing yourself in advance for financing.

Weigh all your financing options – Before you need money is the time when you want to consider how you can go about getting money and getting financing. You want to get that money before you actually need it.

Work on building cash reserves – If you’re thinking about getting some financing in place in the next 6 to 12 months,

  • Consider building up your cash reserves
  • So that the bank can see that cash, and see that position of strength, and
  • They’re willing to lend you money based on the cash that you already have.

Keep track of your income and P&L – If you have some foresight in terms of when you are going to need that financing, definitely

  • Make sure that your income, your Profit and Loss, that your numbers are as strong as they can possibly be,
  • So that when you go in and look for these financing options and you’re having your numbers reviewed,
  • You’re in a strong position.

Additional Resources And Next Actions

Bernard has a lot of other content that you can use to grow your business and be in a better financial situation with your business. We recommend our readers and listeners to visit and get access to a wealth of information that Bernard has been sharing with us.


Bernard Roesch About Bernard Roesch

Bernard Roesch is co-founder and Managing Partner of Mission Consulting. Bernard’s background in the early years of his career was spent in the manufacturing sector, making his QuickBooks perspective a unique one – he understands the intricacies of a complex environment and then applies his strategic skills accordingly.