Before you submit an application for small business financing, take some to work through a financial strategy. Your strategy needs to take into account your business’s immediate and longer-term financial goals.

Some types of small business financing are ideal for providing immediate cash flow into your business. Other types of finance may be necessary to cover larger purchases or plant, machinery or equipment.

The key to choosing the right financing strategy is to consider whether it will help you achieve your short- and long-term business goals. Here are five different strategies you might consider for your small business financing needs.

Bank Loans

Borrowing money from a bank is a popular way for many small businesses to raise the funds they need. However, qualifying for a traditional bank loan can be challenging, especially if your business is still in the start-up phase.

In order to qualify for a bank loan, you will need to put together a comprehensive business plan, along with a cash flow analysis. You may also need to put up an asset to use as collateral to secure the loan.

Business Credit Cards

Credit cards can provide a useful source of financing for many small business owners. Many suppliers and creditors will accept payment by credit card, which can provide an option for short-term financing.

If possible, apply for a business credit card that offers interest-free days. Paying for some of your business expenses or supplies on credit card now and then repaying the entire amount in full before the due date shown on the statement should mean paying no interest on the amounts you’ve spent. Effectively, you can take advantage of up to 45 days interest free as a short-term form of financing.

However, if you do end up carrying an outstanding balance over from month to month on your credit card account, the interest charges can be outrageously high. If it’s likely you’ll carry a balance over from month to month, try to locate a credit card with a low interest rate and a comparatively low annual card fee.

Invoice Factoring

Invoice factoring can be a smart way to keep business cash flow on track. Invoice factoring is a type of accounts receivable financing. The factoring company buys your outstanding invoices from you in exchange for an immediate cash payment that provides the working capital you need right now.

Many small business owners take advantage of the terms offered by factoring companies to keep their cash flow stable. Instead of waiting for customers to take up to 90 days to pay their invoices, you receive payment right away. The factoring company then chases up the customer to receive payment.

In most cases, the factoring company will pay you around 80% of the invoice value upfront. When the customer pays the invoice, you receive the remaining 20% of the value, less any factoring fees.

Small Business Grants and Financing Programs

There are a range of small business grants available from various federal, state and local governments. Many departments also offer financing programs (https://www.sba.gov/content/find-grants) that include low-interest loans, venture capital, or development grants, so it’s worth searching through the database to see whether your business qualifies for any of the financial help available.

Conclusion

Regardless of your financing plan, it should be remembered that any form of debt exponentially increases risk and siphons cash flow, and any kind of equity or VC plan dramatically increases the difficulty and complexity of operations. The preferred method of business growth is cash-flowing or bootstrapping, which is ideal for entrepreneurs who are patient enough and gritty enough to pull it off.