Need to Borrow Money for Your Business? Here Are 3 Alternatives to Business Loans

Business loans are hard to get, but they're not your only option.

When you own a business, there often comes a point where you need to borrow money to maximize growth. Although many lenders offer business loans, they generally have revenue and time in business requirements that some companies will have trouble meeting. Even getting an SBA loan can be difficult for newer businesses.

If business loans are out of the question, here are three other funding options that could work for your business.

1. Personal loans

A personal loan is one of the most flexible types of loans you can get. While most loans must be used for a specific purpose, a personal loan can be used for just about anything, including business expenses.

Another benefit of personal loans is that they're fairly easy to get, especially if you have a high credit score. Traditional brick-and-mortar banks, credit unions, and online banks all offer them, so you'll have plenty of options. Loan amounts normally range from $1,000 to $100,000 or more, and depending on your credit, you could qualify for a low interest rate.

Interested in a personal loan? Check out The Ascent's best personal loans to find a lender.

2. Business credit cards with a 0% intro APR

A business credit card is a credit card designed for small business owners. Like other types of credit cards, it allows you to pay for expenses on credit and pay them off over time.

In most cases, credit cards aren't a great choice for borrowing money. Since they typically have high interest rates, it's better to pay your card's balance in full every month to avoid those credit card interest charges. However, some cards have a special offer for a 0% intro APR on purchases.

If a credit card has a 0% intro APR on purchases, you can carry a balance with no interest charges until the introductory period ends. Some business credit cards offer this for 12 months, meaning you'd have a full year of interest-free financing. Just keep in mind that the credit card's APR will increase quite a bit after that time ends. To avoid a big bill, pay off your card's full balance during the intro period.

Looking for a business credit card? Here are The Ascent's best business credit card picks.

3. Home equity line of credit

A home equity line of credit (HELOC) allows you to borrow against your home equity. Let's say you have a $300,000 home with $150,000 left on the mortgage. A lender would likely allow you to use that $150,000 in home equity to get a line of credit for up to a certain amount, such as $75,000, depending on that lender's limits.

This option isn't available to everyone, since it requires you to have home equity. There's also more risk involved. You need to be sure you can pay back what you borrow, because your home serves as the collateral.

Despite the risk, HELOCs can be a great borrowing option. You can use as much or as little of your line of credit as you want, and you can borrow again after you've made payments on it. Interest rates are also normally lower than those on other types of debt.

Want to get a HELOC? See The Ascent's best HELOC lenders.

There are lots of ways to borrow money for your business outside of going the traditional business loan route. Depending on your financial situation, a personal loan, business credit card, or a HELOC could all be convenient options with low interest rates.