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7 Strategic Loan Options to Fuel Your Business Growth in 2025

Thoughtful borrowing can be the catalyst that transforms challenges into success stories

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loan options for startups
Image Credit: Midjourney

Many small businesses struggle to pay back COVID-19 loans to the government. An average startup has over $663k as its loan amount. Combining these two seemingly unrelated statistics explains why more small enterprises are looking into alternative loan types today.

Entrepreneurs often need a quick cash injection to bridge the gap between a good idea and its successful execution. Whether they’re scaling business operations or seizing a new opportunity, they have to look into various loan options. Most importantly, they must understand when to use a particular type of loan. It helps them find the best funding source for their enterprises.

This blog will go over seven different loan types and then give you a list of important factors to keep in mind when applying for a business loan. So, let’s start learning, shall we?

Term Loans

Suppose you need a lump sum of money immediately to acquire another business, meet sudden vendor expenses, pay back owed taxes, or something else. Term loans will give you this amount, and you’ll then repay this loan in installments. These loans are perfect for startups that are:

Opening a new location

Launching a product line

Marketing a new line of products

Compared to other loan types, this one has high borrowing limits. Also, repayment schedules are predictable so that you can simplify your financial planning. However, SBA-approved lenders will need a very strong credit history from your business to approve term loans in the first place.

If you’re looking for debt refinancing, then a credit card loan is a much better option. It will allow you to consolidate high-interest credit card debts into a single loan with lower rates via:

  • Lower, fixed rates
  • Zero origination fees
  • A simple monthly payment
  • Same-day fund transfers (up to $100k)

Lines of Credit

The second option is to open a business line of credit. You will get revolving access to monetary funds up to a pre-approved limit. But here’s the catch: Interest is only paid on the amount drawn from these funds. So, you can easily cover your short-term expenses with these funds. Payroll or inventory during seasonal ups & downs! A line of credit also funds time-sensitive deals.

Imagine you need money for bulk supply purchases or don’t know exactly how much money you will require to keep your business afloat during crises like COVID. That’s when lines of credit will come to your rescue! You get the flexibility to borrow as per your needs without reapplying.

Lucky for you, SBA’s new lines of credit offer up to $5 million in small business funding. Usually, seasonal businesses like hospitality and retail use this loan type in the United States.

SBA Loans

Talking about SBA loans, the US Small Business Administration guarantees a portion of them. In FY2023, over 1,200 small businesses throughout America received SBA loans, and this loan type is everyone’s favorite since it offers very low interest rates (10.25% of $50k) and longer terms of repayment (up to 25 years). Here’s when you can apply for SBA loans:

  • Launching a new business in the United States
  • Expanding business operations like hiring more staff
  • Investing in a new kind of tech for your enterprise
  • Buying office supplies or purchasing real estate (through SBA 504 loans)

Just keep in mind since SBA loans are like low-hanging fruits, everyone wants to apply. So, the application process is quite time-consuming and needs thorough documentation.

Equipment Financing

Let’s say you want to buy new office equipment. It can be anything ranging from office supplies to heavy-duty machines. This loan type will let you borrow money for these purchases, and your equipment (the very item you want to buy with this loaned wealth) will be used as collateral. So, this loan type’s benefits include:

  • You’ll preserve your cash flow 
  • You acquire assets that are essential for business
  • You may even get tax benefits via depreciation deductions
  • You can get funds transferred to your accounts much faster 

Many businesses use equipment financing loans to upgrade business tools so their startup will have a competitive advantage. Also, these machinery purchases will increase your capacity to produce more goods. Also, you can reduce downtime by getting your hands on new equipment.

Invoice Financing

Do you want to borrow against outstanding invoices? If you do, then invoice financing is just the loan type you need! You can get cash even though you have awaiting customer payments.

Now, this loan type helps you bridge cash flow gaps caused by long payment cycles (when you fail in your recollection endeavors) and manage expenses during recession periods (by using unpaid & yet-to-be-realized invoices as leverage). Invest in new projects without waiting for receivables!

Microloans

Data from 2022 says that 60% of American startups don’t even have $50,000 in debt. However, it is also true that 90% of small businesses fail! That’s why we have microloans designed to assist nonprofits and community-based ventures. If your startup finds itself in a financial pit, then you can apply for a microloan, especially when your business:

  • Can’t cover initial startup costs like office supplies or marketing campaigns
  • Doesn’t have enough cash to manage day-to-day expenses during the early stages
  • Needs support as a minority-owned business or female-run enterprise

Even with your limited credit history of collateral, you can get these loans right away. Also, this loan type offers you very low interest rates.

Commercial Real Estate Loans

Commercial loans are for business owners who want to invest in commercial real estate, such as office spaces or warehouses. You apply for these loans when you wish to acquire real estate instead of leasing land long-term. This way, you can build equity in your business property over time and also get fixed-rate options for stability against market fluctuations.

How to Choose the Right Loan Type?

Here’s how you can choose the right loan type for your business:

Match the loan type with your specific needs (e.g., working capital vs. long-term growth).

Assess your cash flow projections honestly before committing.

Understand what lenders look for, credit score, revenue history, and collateral, and prepare accordingly.

Some loans (e.g., MCAs) offer rapid disbursement but at higher costs; others (e.g., SBA loans) require patience but deliver better terms.

Keep in mind that loans are not just a financial lifeline; they’re strategic tools that can propel your business forward when used wisely.

Learn the nuances of each loan type and align them with your entrepreneurial goals. This way, you can unlock new opportunities while maintaining financial health.

Whether you’re managing cash flow with a line of credit, scaling operations through term loans, or investing in assets via equipment financing, thoughtful borrowing can be the catalyst that transforms challenges into success stories.

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The surprising truth about leadership styles that can make or break your team’s success.

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The Leadership Shift Every Company Needs in 2025

Struggling to keep your team engaged? Here’s how leaders can turn frustrated employees into loyal advocates.

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Bridging the gap between employees and employers
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In workplaces around the world, there’s a growing gap between employers and employees and between superiors and their teams. It’s a common refrain: “People don’t leave companies, they leave bad bosses.”

While there are, of course, cases where management could do better, this isn’t just a “bad boss” problem. The relationship between leaders and employees is complex. Instead of assigning blame, we should explore practical solutions to build stronger, healthier workplaces where everyone thrives.

Why This Gap Exists

Every workplace needs someone to guide, supervise, and provide feedback. That’s essential for productivity and performance. But because there are usually far more employees than managers, dissatisfaction, fair or not, spreads quickly.

What if, instead of focusing on blame, we focused on building trust, empathy, and communication? This is where modern leadership and human-centered management can make a difference.

Tools and Techniques to Bridge the Gap

Here are proven strategies leaders and employees can use to foster stronger relationships and create a workplace where people actually want to stay.

1. Practice Mutual Empathy

Both managers and employees need to recognize they are ultimately on the same team. Leaders have to balance people and performance, and often face intense pressure to hit targets. Employees who understand this reality are more likely to cooperate and problem-solve collaboratively.

2. Maintain Professional Boundaries

Superiors should separate personal issues from professional decision-making. Consistency, fairness, and integrity build trust, and trust is the foundation of a motivated team.

3. Follow the Golden Rule

Treat people how you would like to be treated. This simple principle encourages compassion and respect, two qualities every effective leader must demonstrate.

4. Avoid Micromanagement

Micromanaging stifles creativity and damages morale. Great leaders see themselves as partners, not just bosses, and treat their teams as collaborators working toward a shared goal.

5. Empower Employees to Grow

Empowerment means giving employees responsibility that matches their capacity, and then trusting them to deliver. Encourage them to take calculated risks, learn from mistakes, and problem-solve independently. If something goes wrong, turn it into a learning opportunity, not a reprimand.

6. Communicate in All Directions

Communication shouldn’t just be top-down. Invite feedback, create open channels for suggestions, and genuinely listen to what your people have to say. Healthy upward communication closes gaps before they become conflicts.

7. Overcome Insecurities

Many leaders secretly fear being outshone by younger, more tech-savvy employees. Instead of resisting, embrace the chance to learn from them. Humility earns respect and helps the team innovate faster.

8. Invest in Coaching and Mentorship

True leaders grow other leaders. Provide mentorship, career guidance, and stretch opportunities so employees can develop new skills. Leadership is learned through experience, but guided experience is even more powerful.

9. Eliminate Favoritism

Avoid cliques and office politics. Decisions should be based on facts and fairness, not gossip. Objective, transparent decision-making builds credibility.

10. Recognize Efforts Promptly

Recognition often matters more than rewards. Publicly appreciate employees’ contributions and do so consistently and fairly. A timely “thank you” can be more motivating than a quarterly bonus.

11. Conduct Thoughtful Exit Interviews

When employees leave, treat it as an opportunity to learn. Keep interviews confidential and use the insights to improve management practices and culture.

12. Provide Leadership Development

Train managers to lead, not just supervise. Leadership development programs help shift mindsets from “command and control” to “coach and empower.” This transformation has a direct impact on morale and retention.

13. Adopt Soft Leadership Principles

Today’s workforce, largely millennials and Gen Z, value collaboration over hierarchy. Soft leadership focuses on partnership, mutual respect, and shared purpose, rather than rigid top-down control.

The Bigger Picture: HR’s Role

Mercer’s global research highlights five key priorities for organizations:

  • Build diverse talent pipelines

  • Embrace flexible work models

  • Design compelling career paths

  • Simplify HR processes

  • Redefine the value HR brings

The challenge? Employers and employees often view these priorities differently. Bridging that perception gap is just as important as bridging the relational gap between leaders and staff.

Treat Employees Like Associates, Not Just Staff

When you treat employees like partners, they bring their best selves to work. HR leaders must develop strategies to keep talent engaged, empowered, and prepared for the future.

Organizational success starts with people, always. Build the relationship with your team first, and the results will follow.

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