The financial market has a lot of options for funding small businesses during times of debt and growth. In order to choose the right option to further the interests of your business or to get out of a tight spot, the two common financial option that many small businesses turn to are lines of credit and term loans.

A common misconception is that business loans are almost impossible to secure when your business’s financial statement projects a bad credit history. While the process may be rigorous there are other forms of loans that are provided by lenders under different conditions. In cases where a business’s credit risk is high, lenders will up the interest rates and other charges to ensure that the loan will not be defaulted on.

Every business/startup has its own stories, of success or failure. Their fate depends mostly on the insights they have about business finance and the market expectations for their initiative. Many businesses have failed in nascent stages owing to some vital aspects of financing, often looked over for some stereotyped reasons.

A business can be started with an investment that we call capital, which may require for the entrepreneur to rely on loans borrowed from a lender. It is usually difficult for a new startup to apply for a loan and get it unless they are convincing enough about the repaying of the amount they are taking as a loan, usually by providing a list of assets and other belongings that may be forfeited when the loan is not repaid on time.