Heartland Lending Solutions

What You Need to Know About Loans for Small Business Owners

Thursday, February 16, 2017

Small business owners often deal with a lot of costs — planned and unplanned. And while a business may be doing great in sales, if too much capital is in unpaid invoices or invested in inventory, it’s hard to pay the electric bill or update equipment. While loans for small business owners can resolve cash flow problems, this route is often avoided or pursued unsuccessfully, resulting in harm to the business.

Although no one wants to take on debt, business loans are often essential for growing businesses. Small business loans can provide capital to keep a business operating until it has more cash on hand. It can be crucial to having adequate cash for small business growth.


The key to optimally leveraging small business loans is first to understand your cash flow needs. Take a look at the money flow into your business each month, and the outflow of money for expenses. The difference is either a positive cash flow (you have more money coming than going out) or a negative cash flow (you have more money going out than coming in). The latter is a problem.

Working capital loans for small businesses can resolve cash flow trouble.

The second thing a small business owner needs to do is educate themselves on the different types of loans available for small businesses and determine what best fits their needs. Hence, the lights stay on and employees get paid on time.


The following are the most common types of loans for small business owners to consider:

Short-term loans

Typically, short-term loans are for small sums of money needed to cover specific business costs, like repairs. They are financed through a bank or other type of lender. Repayment terms are usually six months to a year, depending on the amount, and the interest is generally less than loans with longer terms because of the short repayment period. These loans tend to be less risky for the lender and will usually get approved and funded more quickly. A short-term loan can be handy for resolving an unexpected cash flow problem for small business owners. 

Long-term or bank loans

Best tapped for costly equipment or expansion, long-term or bank loans can be leveraged for specific high-dollar investments in growing your business. These loans can be challenging to qualify for, and some banks will require collateral. Repayment is usually 10 to 25 years. For a small business, these types of loans must be considered carefully. They are not intended to resolve immediate cash flow issues. 

Equipment financing

A frequent cost for small businesses is the need for new or replacement equipment. Equipment financing loans can only be used for financing equipment or machinery your business needs to operate. The loan amount is based on the cost of the equipment you purchase, and the asset will serve as collateral for the loan.

Business lines of credit

A business line of credit is the most flexible type of small business loan to address cash flow issues. It allows you to borrow what you need as you go along and repay when you can. There are few restrictions on how the money is used, as long as it’s for your business, but you do need to stay within specific parameters, like not exceeding the credit limit. 

For resolving issues with fluctuating cash flow, a small business line of credit is usually the best choice. Whether you’re just getting off the ground, trying to weather your slow season, or you want to expand your business, a line of credit can provide the working capital you need when you need it, and you’ll only pay interest on the amount you use. 

Heartland partners with Lendio, the nation’s largest and most trusted loan marketplace, to give you unprecedented access to capital. Whether you need a few thousand dollars for new equipment, $5M for a significant expansion, or a business line of credit to leverage when you need a cash flow solution, we can help you find the most reasonable rates and the loan type that fits your needs best. It takes as little as 15 minutes to fill out an application, and you can have accessible capital in only a few days. So don’t let cash flow negatively impact your business. Let us help you find the right solution. Get started with Heartland Capital today so you can focus on growing your business.


Heartland is the point of sale, payments and payroll solution of choice for nearly 1,000,000 businesses on a mission to sell more, keep customers coming back and have more time to focus on building a remarkable business. Learn more at heartland.us.