STATEN ISLAND, N.Y. – Whether you need money to launch a business, or require capital to help you expand an ongoing enterprise, you’ll need to know your options.

“One of the first steps in shopping for a loan is to explore the various types of financing options available,” said Certified Business Mentor John J. Amodio, chairman of SCORE-Staten Island. “To make a wise financial decision, it’s vital to understand what each of the choices are – and how they are defined.”

To help you get started, Amodio and SCORE-Staten Island are sharing the following brief definitions of 10 types of popular financing:

BUSINESS CREDIT CARDS – Credit cards issued in the name of the business. Applications are often evaluated based on the owner’s personal credit scores and income from all sources (not just the business). These cards can also help build business credit, and many do not report to the owner’s personal credit report unless they are not paid back. Personal guarantee required.

BUSINESS/MERCHANT CASH ADVANCE – Funds are advanced based on expected cash flow or credit card receipts, usually by reviewing previous sales/receipts. These are short-term arrangements, and payments, which are usually a percentage of sales, are taken from future credit card sales or revenue on a daily or weekly basis.

CROWDFUNDING – Funds are raised from large numbers of individuals, usually using online platforms. Reward crowdfunding offers backers an early version of the product or other rewards, while debt crowdfunding enables lenders (individuals or institutional investors) to lend part of the money the business needs and earn interest when the debt is repaid. Equity crowdfunding allows individuals to invest in a business for potential future return.

EQUIPMENT FINANCING – Financing is secured by equipment or other collateral, including leasing arrangements. It may be used to acquire assets, or assets owned by the business may be used as collateral to secure financing.

INVOICES/RECEIVABLES FINANCING – Funds are advanced against unpaid invoices or receivables, with a portion advanced upfront and the rest (minus fees) when the invoice is paid. This may also be called “factoring.” Alternatively, financing may be extended based on expected receivables, requiring the business to make payments.

LINE OF CREDIT – This financing makes a specific amount available to the business to be used as needed. Lines of credit are often short-term arrangements but may be renewable. Offered through traditional financial institutions such as banks, as well as through online lenders.

MICROLOAN – Small loans, usually for $50,000 or less. Some microloans are offered through Community Development Financial Institutions (CDFIs). The SBA microloan program offers small loans through financial institutions. Some microloans aim to help underserved entrepreneurs.

SBA LOAN – The Small Business Administration (SBA) guarantees loans offered through banks and other financial institutions. Terms are often attractive with low interest rates and favorable repayment terms. SBA loan fees, including guarantee fee, referral fee, packaging fee and closing costs are typically rolled into the total loan. There are several different SBA loan programs, and terms and qualifications vary for each. The most popular is the 7(a) program.

TERM LOAN – A specific amount of money borrowed for a specific period of time. Interest rates and payments are often fixed, though some term loans carry variable interest rates. 

VENDOR TERMS – Suppliers or vendors allow the business to purchase goods or services and pay for them in 10 - 180 days. Net-30 terms require payment in thirty days, for example. “This list is just the tip of the iceberg when it comes to business financing. In fact, there are numerous other options available,” Amodio said. “To learn more, contact SCORE-Staten Island for cost-free guidance. Our business mentors are here to help.”

About SCORE-Staten Island
SCORE-Staten Island is dedicated to fostering a vibrant small-business community within its New York City borough by providing cost-free education and confidential mentoring to both aspiring and established entrepreneurs. Headquartered at 950 West Fingerboard Road, Grasmere, in the iconic Staten Island Advance Building, the organization is Chapter 476 of the nationwide SCORE, a nonprofit association and resource partner with the U.S. Small Business Administration (SBA). For additional information, or to schedule an appointment, SCORE-Staten Island may be visited at; telephoned at 718-727-1221; emailed at, and visited on Facebook at

Media Contact: Barton Horowitz
Relevant Public Relations, LLC
Headquarters: 7186821509
Mobile: 9177158761

Need Small-Business Financing? Learn the Lingo