The Best Financing Options for Medium-Sized Businesses

No matter how large your business is, you need to find the right financing options for it. Of course, the types and amount of funding often depend on the size of your organization. Medium-sized businesses are often mature operations that may have been privately held for generations. They have unique needs that cannot be suited by small business or large, corporate financing.

The Needs of a Mid-Sized Business

These types of organizations usually need financing to help with short-term cash flow, adjusting the debt-to-equity ratio, replacing equipment and facilities and protecting long-term financial health. These needs can be address by a variety of types of loans and other financing structures.

In most cases, businesses in this category have in-house financial professionals. They have a greater capacity to review the current financial structure and seek optimal funding sources compared to small businesses.

Types of Loans Available

Many lenders offer excellent loan options for mid-sized businesses. Since they are usually more mature and established than their smaller counterparts, they can get better terms. These are some of the major options:

  • Factoring: if you need help with short-term cash flow, invoice factoring may be the solution. This type of lending involves selling invoices or securing debt against them. The purpose is to bring in money without having to wait for customers to settle their accounts. It can be a good way to avoid drains on your cashflow.
  • Term Loans: You can get a term loan to help pay for major expenses such as equipment or real estate. In some cases, unsecured loans are also available. Many mid-sized businesses rely on these to help optimize their cash flow when making major capital acquisitions.
  • Trade Credit/Purchase Order Financing: For businesses selling physical goods, this type of financing can be very helpful. It involves borrowing money to help cover the cost of pre-sold goods. If you need money to help fulfill purchase orders, this could be the right option for your business.
  • Lines of Credit: A line of credit is a little like a credit card because you have a credit limit that you can repeatedly borrow against. However, it does not require a card to borrow money and you draw directly into your bank account.

Get Started

Learn more about the financing options for medium-sized businesses. When you understand your options, you can make better choices to ensure that you have the funds you need to succeed. Get started today to secure your financial future.