4 Ways To Finance Your Small Business In 2021  

The COVID-19 pandemic has negatively affected the loan availability as well as loan eligibility of many businesses and individuals. So, if you’re still looking to finance your small business to stay in the fight, not everything is lost. Here are four ways can finance your small business in 2021:  

  • Traditional Loans  

Although the COVID-19 pandemic has generally caused a shortage of available traditional types of loans, there are some widely accepted misconceptions about accessibility to these types of loans and their availability. You can read more about it on this recommended site.   

Regardless of the pandemic and economic slowdown, you can still choose between a few business loans options to help you grow and maintain your business operations:   

  • Term loans  

Term loans are an excellent option to go for if you have a good credit score and a strong and healthy business.  

  • SBA loans  

You should consider this type of business loan if you have a strong business that can wait for funding.   

  • A business line of credit  

This business financing option is a viable option when you need short-term financing and want flexibility.  

  • Equipment loans  

These types of loans are good to go for when you want to own the equipment outright.   

  • Invoice factoring  

This type of business of financing is helpful if you’re dealing with unpaid customer invoices.  

  • Invoice financing  

If you want control over your unpaid customer invoices, you should look closer into invoice financing.   

  • Merchant cash advance  

A merchant cash advance is a choice for businesses with high and steady credit card sales and the ability to handle recurring payments.   

  • Personal loans  

If you have a startup company, you can apply for a personal loan, especially if you don’t have a bad credit score   

  • Business credit cards  

Business credit cards are fantastic to have in case of ongoing business expenses.  

  • Fintech funding options  

Fintech (financial technology) lenders give loans themselves or through partnerships with partner banks. In many ways, they provide alternatives to the traditional bank and government loans, though at similar loan amounts and lending terms. They are a better choice for business owners who don’t have a longstanding relationship with a traditional bank.   

Some of the fintech funding platforms currently available include:  

  • Kabbage  

This fintech funding platform is the best option for those who own an eCommerce business on sites such as eBay or Amazon. Kabbage is more concerned with the status you have as an online seller than with the traditional credit score and collateral criteria. Still, you’ll need detailed accounting data with cash flow statements. The rest of your eligibility is determined by customer feedback, selling history, turnover, customer feedback, and other supplemental digital metrics.  

  •  OnDeck   

Like Kabbage, OnDeck also approves loans based on alternative metrics which determine the business’ health. What OnDeck is interested in is the annual revenue to determine eligibility and tailor the loan and payments according to your needs.  

  • PayPal  

PayPal offers traditional business and working capital loans based on the business’ earnings on its site. Paypal funding is speedy, requires no collateral, and there’s no penalization for a low credit score. Keep in mind how loans you get through PayPal’s fintech won’t build your business credit. Still, it improves your chances of securing any future funding through PayPal loans.   

  • Lendio  

Lendio acts as a financing aggregate platform. It works with a network of over 300 lenders, Kabbage and OnDeck included, to match users with the optimal option that fits their needs. Using Lendio offers the convenience of reviewing hundreds of fintech organizations and applying with a simple form. The only downside to using such an intermediary is that receiving funding takes longer.    

  • Peer-to-Peer Lending  

Peer-to-peer (P2P) lending is used by many startups which borrow money from their peers or other individuals while cutting out the middleman, such as financial institutions.   

Some of the most known peer-to-peer lending websites are:   

  • Prosper  
  • LendingClub  
  • Upstart  
  • Funding Circle  
  • Peerform 
  • Other Alternatives  

Governments worldwide have set up their COVID-19 relief and recovery funds and grants to support businesses in various industry sectors that have been greatly affected by the pandemic. Look up these programs and requirements to apply in the country and state where your business is registered.   

Additionally, you can try some other alternative ways to finance your business, especially if you’re a startup:  

  • Venture capital (VC)  

Venture capital is a form of private equity and a type of financing investors provide to small businesses and startup companies expected to have a high return on investments.  

  • Angel investor  

An angel investor invests as an individual in a new or small business venture, typically looking for a 25 to 60% return on investment. 

  • A pitch competition   

This type of contest wherein entrepreneurs and innovators pitch business ideas to a panel of judges may land them a cash prize or investment capital.    

  • Crowdfunding websites  

Crowdfunding websites provide a platform for your page with promotional materials. Visitors to the site can then decide to back up your project financially. The most popular crowdfunding companies are Kickstarter and Indiegogo.    


Although securing a business loan may be more challenging these days, it’s not impossible as long as you’re not misled by general misconceptions surrounding the loan markets in the wake of the COVID-19 pandemic. More than a few viable traditional and alternative types of loans and business financing are available to choose from in 2021.  

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