Growing a business takes vision, hard work, and the right resources. For Maryland business owners, the right funding can help turn plans into action, whether it’s opening your doors, investing in new equipment, or preparing for your next stage of growth.
There’s no single “best” way to fund a business. The right financing depends on where your business is today, what you want to accomplish next, and what your budget can support.
Once you know what you need, you can start comparing your options. Here are four common types of funding for small businesses and how each one can support different goals.
Four common business funding options
Businesses commonly use four types of financing: loans, lines of credit, credit cards, and commercial real estate financing.
Financing type | How it works | Common uses | Consider this if… |
You receive a lump sum and repay it with interest over time. | Larger, one-time expenses with a known price tag. | You know how much you need for a planned expense and want to repay a set amount over time. | |
You can borrow up to an approved limit and access funds as you need them. | Managing cash flow, seasonal expenses, and short term needs. | Your funding needs may change, and you want the flexibility to borrow as expenses come up. | |
You use a revolving line of credit for business purchases. | Managing everyday business purchases and expenses. | You want a convenient way to manage routine purchases and keep business expenses separate. | |
You borrow funds to purchase or refinance commercial property and repay them over time. | Investing in a space for your business. | You’re ready to purchase or refinance a property for your business. |
Business loans can help fund larger, planned investments
If you know what you want to invest in and what it will cost, a business loan may be a good option.
With a business loan, you receive a lump sum and repay it over time with interest. Because you borrow a specific amount, business loans work well for larger investments with a known price tag.
You might use a business loan for:
- Renovating an office, storefront, or other business space.
- Purchasing major equipment.
- Investing in inventory, supplies, or other needs as your business grows.
If you’re exploring small business loans in Maryland, think about both the immediate expense and how the investment supports your longer term goals. SECU offers business term loans and other business credit options to help eligible Maryland businesses invest in what’s next.
Business line of credit vs. loan: What’s the difference?
Business loans and lines of credit both give you access to funding, but they work differently.
A business loan gives you a lump sum that you repay over time. A line of credit gives you access to funds up to an approved limit, so you can borrow as needs arise.
That flexibility can make a line of credit helpful when expenses change throughout the year. For example, you might use one to:
- Invest in technology, vehicles, or other needs as your business grows.
- Manage expenses during a slower season.
- Cover an unexpected expense while keeping cash available for other priorities.
When you know exactly where you’re going and what it will cost to get there, a business loan may make sense. When you need more flexibility along the way, a line of credit may be a better fit.
Business credit cards can simplify everyday spending
When you’re running a business, even routine purchases can be a lot to manage. A business credit card can simplify everyday spending and help you keep business and personal expenses separate.
You can use a business credit card to:
- Purchase supplies online or in person without using personal funds.
- Set up recurring payments for regular business expenses.
- Give trusted employees a convenient way to make approved business purchases.
Keeping business and personal expenses separate can also make bookkeeping simpler and give you a clearer view of your business finances. If your business has grown beyond your personal account, learn more about when it may be time for dedicated business banking.
Commercial real estate financing can help you put down roots
For some business owners, growth means finding a larger storefront, opening another location, or investing in a space of their own. Commercial real estate financing can help you take that next step.
Before you buy, look at the decision from a few angles.
- How will the new space support your business and its long term goals?
- What upfront costs will you need to plan for?
- How will the monthly payment fit into your operating budget?
- Will the property give your business the space and flexibility to keep growing?
If owning your space is part of your plan, explore commercial real estate financing available through SECU, including options for eligible medical professionals.
Financing isn’t the only way to fund a business
Loans and lines of credit are only part of the funding picture. Depending on where you are in your business journey, other funding sources can help you turn an idea into a plan or keep building on your momentum.
Other funding sources can include:
- Personal savings
- Loans or investments from friends, family, or outside investors
- Grants or crowdfunding
- Maryland funding and incentive programs
- Small Business Administration financing, also known as SBA loans
Some options involve borrowing money that you repay, while others, such as certain investments, may involve giving an investor an ownership stake in your business.
Maryland entrepreneurs can also learn more about funding and incentive programs available through Maryland Business Express. Exploring what’s available can help you find resources that fit your business today and support where you want to take it next.
How to choose the right financing for your business
The right financing should support your goals without stretching your business beyond what it can comfortably manage. Before choosing an option, ask yourself:
- Is this a one time expense or an ongoing need?
- How quickly do I need the funds?
- What could this investment help my business accomplish?
- What repayment amount can my business comfortably manage?
- How established is my business and what financial documentation can I provide?
There may not be one perfect answer. Aim to understand your options and choose the financing that makes sense for your business, your budget, and your plans.
Find business funding that supports what’s next
Maryland’s small businesses do more than drive our economy. They create jobs, serve neighbors, bring ideas to life, and help our communities grow. At SECU, we’re proud to support the people behind those businesses.
Wherever you are in your business journey, understanding your business funding options can give you greater confidence in your next step. Start with your goal, understand what your budget can support, and choose financing that gives your business room to grow.
When you’re ready to talk through the possibilities, our business banking specialists are here to help. Discover our business loans, lines of credit, and credit cards and commercial real estate financing, or connect with our team to talk about what makes sense for your Maryland business.
