Alternatives to SBA Financing

two female entrepreneurs having a business meeting, alternatives to sba financing

Estimated reading time: 4 minutes

Not every small business meets the Small Business Administration’s (SBA) requirements to secure a loan; in fact – most don’t. So, what alternatives to SBA financing are available for entrepreneurs who need working capital loans? Below are a few options you can explore if SBA financing isn’t possible.

Personal loans.

Your first alternative is to take out a loan yourself. This means that your personal credit history and creditworthiness will be scrutinized by banks and other organizations rather than your small business’s profitability. If you have a stellar credit score, you could be fast-tracked for adequate loans to finance your business – but most people don’t have a great credit score, which can be quite risky.

The downside of personal loans means that if you don’t manage to recoup your losses and revitalize your business, the obligation and consequences fall on your head and your collateral. This can mean liquidating personal assets, such as cars and residential property, to pay for the loans should you fail to do so.

This is why personal loans are ultimately highly risky, and are only used in dire times.

Loans from friends and family.

If you don’t want to put your personal property at stake or your credit score isn’t up to par to secure personal loans, you can turn to people close to you for financial support as an alternative to SBA financing. However, many people feel uncomfortable securing loans from their relatives or friends, as this simply moves the risk to them.

However, a benefit is that you can negotiate lower interest rates or find alternative methods for repayment in some scenarios. You could ask them to become investors, giving them a stake in your business in exchange for their loans too – though this still has the risk of losing it all (yours and theirs) if the business cannot be revitalized.

The key to borrowing from close friends and relatives is to be transparent about the odds of your business recouping its loss. You should also be diligent in making payments to avoid personal drama infiltrating your business.

Term loans.

If your business isn’t in financial trouble now, but you can see the writing on the wall, you may have time for a lengthy alternative to SBA financing. Term loans are one such option.

You still have to meet the requirements for borrowing from the lender and wait through the lengthy application processes, but this might be quicker than an SBA loan in many situations.

These types of loans typically shell out higher amounts and come with low-interest rates. However, they are more thorough with their assessment as they want to ensure you can return their money in due course.

Equipment financing.

Sometimes, your business model may not seem highly profitable to others and can torpedo your hopes for securing SBA financing or even other financial support. However, you can still turn to an alternative that does not take into account your business status or profitability as much. If your small business uses expensive equipment for its production process, you can use equipment financing to take out loans.

These types of loans use your machinery as collateral, and your other assets won’t be part of the process. This type of financing can be quicker, thanks to minimal paperwork. But you will be expected to provide a down payment. Some companies even require a down payment as a step in their process.

Online loan providers for alternatives to SBA financing.

If your business isn’t eligible for SBA financing and you don’t qualify for a personal bank loan, or it seems too risky, then you can turn to the internet for help! Probably Funding offers quick and streamlined working capital loans as a needed alternative to SBA loans, personal loans, or asking friends and family.

Our applications can take only a day or two for approval! Plus, we don’t need the extensive collateral that many others require. Some online small business loans have high interest rates, or prepayment fees in case you pay them back early – but not Probably Funding!

Be sure you choose a reputable online lender like Probably Funding, and always check reviews, affiliates, and history to ensure you are getting your loan through a company that doesn’t cut corners. Contact Probably Funding today!


This Probably Funding blog post is purely educational and features general information and opinions. Nothing contained herein is intended to constitute advice or recommendations and should not be treated as such.