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Today’s business owners have more options for business financing than ever before.  But some methods to finance your business may cause you to toss and turn at night more than others.

Of course, stress can be subjective. One person’s definition of stress may be different from another’s.  But this list can help you sort through the different ways to finance your business that are less likely to cause you stress — or at least allow you to choose what YOU consider to be low stress.

Here are some lower-stress financing options for your small business:

Low-Stress Ways to Finance Your Business

Apply for Working Capital Loans

Working capital loans are meant to help businesses pay for the day-to-day or ongoing expenses of running a business, not expensive or long-term assets such as buying equipment or real estate. For that reason, they are usually smaller than traditional business loans and can be easier to obtain with a less strenuous application process.

Typically, you can apply for working capital online just by offering a few details about your business, or by going through a finance source you already have a relationship with and literally clicking a few buttons. For instance, you may be pre-approved for a certain amount from an existing financial services company.   Examples of working capital loans include PayPal Working Capital (for PayPal Merchants), Square Capital (for Square Merchants), and Chase Quick Capital (for Chase business banking customers).

Use the money to even out cash flow or stock up on inventory you know you’ll sell during the Holidays.

Today’s working capital sources make paying it back easy. The lender automatically deducts a small portion from your funds to repay the amount periodically.  You won’t have to remember to make payments!

Finance Equipment

If you are buying new equipment, one of your best options to finance your business purchase might be through the manufacturer. For example, if you’re purchasing new computers for your office, you can get financing options through manufacturers such as Dell. Then you don’t have to absorb the entire cost upfront.

Applying for this type of financing is usually fairly straightforward since the company you’re purchasing from wants to make it as easy as possible for you to do business with them. Often it’s a simple add-on to the purchase transaction itself, and can be approved in a matter of minutes or a day or two. Payments can also be relatively low compared to other loan types. It’s fast, it’s easy — and you get flexibility to invest in the tools you need now rather than stressing the business to pay for the purchase in one lump sum.

Apply for Microloans

Microloans are small loans usually from a few thousand dollars, up to $50,000 — with the average being $13,000. And because the amount is smaller than a typical commercial loan and microloan companies try to make the process easy on small businesses, the process of getting one tends to be streamlined. Non-profit groups like Kiva and Opportunity Fund offer microloans. Also, the SBA works with a network of microloan intermediaries.

Of course, you’re not going to get as much money to finance your business as you might with a different type of business loan. The U.S. Small Business Administration estimates most microloan rates to be between 8 and 13 percent, with a maximum repayment term of six years for SBA microloans.

Try Crowdfunding

Crowdfunding using sites like Kickstarter and GoFundMe has exploded in popularity in recent years. And it’s easy to see why. Using crowdfunding allows you to raise money by getting small pledges from your customers and others online. This lets you keep total control of your business rather than seeking out and having to answer to investors or banks. So in that sense it’s low stress.

On the surface, crowdfunding seems like an easy way to finance your business. In reality it’s more complex.

It’s not as easy as just setting up a page and watching the donations roll in. You have to really market your pitch to potential contributors so that you get enough donations to fund your need. You have to give people a reason why funding your project can benefit them, either through the innovations your product or service will deliver, or by offering a tangible reward to contributors. This means that you also have to manage the logistics of creating and fulfilling those rewards into your crowdfunding project as well.

The internet is full of Kickstarter projects gone wrong, if you want to check out the downsides.  But some entrepreneurs have had good success with crowdfunding.

Use Business Credit Cards

Getting a business credit card can be a quick way to finance your business purchases as you need to buy them. American Express, Visa, and most major banks have business credit card options available. So you can compare rates and features to find the one that’s right for you. And another advantage is that using a credit card can make it very easy for you to track all of your purchases and your overall spending each month.

Using a credit card is fast and easy. In that sense, a credit card is a low-stress way to finance your business purchases.

On the other hand, credit cards are expensive if you run a balance month after month. Interest rates can climb above 20 percent!  Be careful, because the high cost can equal high stress. Look for special deals and balance-transfer options that offer no interest for the first six months to a year.

Use Personal Credit Cards

Chances are, you already have a personal credit card or two in your wallet. So using this type of financing can be even quicker and easier than getting a business credit card. Interest rates for personal credit cards vary widely but are pretty comparable to the rates for business credit cards.

Once again, remember that “low stress” is in the eye of the beholder. Make sure you don’t max out personal cards for business purchases, and leave yourself without any way to buy the things you need at home. Additionally, you can get more total credit if you use separate business cards for business purchases. Having that separation can also help you stay organized and proactively develop a business credit score. For quick purchases or small items, using a personal credit card can be a pretty low stress option.

Appeal to Family and Friends

This tried and true option is actually how many entrepreneurs finance their business. It’s pretty straightforward. You simply approach trusted family members or friends about borrowing some money to finance your business need or objective.

The benefit is that family and friends are often easy to work with and don’t demand high interest rates (as long as they really like you!). They can also give you some flexibility when it comes to repayment terms. And borrowing from them usually doesn’t involve a personal or business credit check.

However, borrowing money from loved ones can be tricky. If you aren’t able to pay them back timely, it can take a toll on your personal relationships. And if you make a habit of not paying people back, you eliminate the goodwill you have with the people in your life. Who needs busted relationships along with a busted business, if things go south?

Use Personal Savings

If you’re lucky enough to have personal savings stored away, then this can be a simple and low stress way to finance your business. Using personal savings gives you a lot of flexibility because you don’t have to work with a lender or go through a distracting application process. You also won’t have to worry about paying interest.

However, keep in mind the downsides. Using your savings can make you less secure financially. Say you empty your account and then your furnace breaks or you have a health scare that isn’t covered by insurance. That fund that you might have been saving for personal emergencies won’t be an option anymore. Additionally, you won’t be able to make that money work for you by investing it or accruing interest. And of course, you have to actually have enough money in the first place to be able to designate it for business purposes. So this isn’t even an option for some entrepreneurs.

In addition, it’s usually best to avoid using any savings you have in a retirement account. There are often early withdrawal penalties for retirement accounts. And in many cases, letting that money work toward your retirement is a better choice than using it to finance business operations.

Take Out a Home Equity Line of Credit on Your Personal Residence

I’ll mention this last option, but consider the ramifications long and hard before diving in.

Taking out a line of credit on your home might be highly stressful for some entrepreneurs. After all, if you aren’t able to make the payments, then you put your home and family in jeopardy. If your business fails, you might lose your home or at least the built-up equity.

I do not recommend using home equity to finance your business (I’d never do it!). But I know some entrepreneurs who have used their home equity and feel it’s a simple and easy source of funds. To me it would be high stress. But they feel differently.

The upside of using this option is that you usually make a single payment each month, which can simplify the process of paying back the loan.

Finding the Right Option For You

So there you have it – great options to finance your business in ways that some might consider low stress.  But again I emphasize that what is low stress to one person, may be considered stressful by another entrepreneur.  Don’t make rash decisions.  Think through what could go wrong, as well as the situation in front of you today when you choose.

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