Today, some of the challenges affecting growth in the engineering space include limited financing and a shortage of skilled labor. Engineering companies need money for technology, payroll, transition into green practices, and creating niche business areas. Here are a few loan options these companies can consider:
Bank lending is not only an affordable option but offers the flexibility to use the borrowed funds for nearly any purpose. Depending on the terms of the loan, interest rates can be as low as single digits, and loan terms range from one year to a maximum of 30 years. However, these loans require more credit, business documentation, and collateral than other options.
Sometimes businesses find it difficult to get approved for a bank loan. Small Business Administration’s SBA loan guarantee program is an option that engineering companies explore when seeking bank-rate financing. The SBA guarantee makes traditional lenders more willing to offer to finance. Compared to other loan options, SBA financing requires considerable personal and business documentation, as well as proof of profitability.
With many lenders considering this to be an unpredictable sector, it is difficult for many engineering companies to secure financing. Companies that are turned away by traditional lenders can go for alternative loans or fin-tech loans. This option requires less documentation and takes one or two weeks to get financing.
If all the other options fail, an engineering company can choose to sell part of its future business receivables for immediate cash financing. These loans allow you to access future revenue immediately, require minimal documentation, and can have instant approval.
Apart from these loan options, different organizations offer the financial support that businesses need. Ambition Funding Solutions offers a wide variety of commercial, financial solutions to help your business grow. Contact us today to learn more about our services.