April 17, 2020 By SmartBiz Team

Running a successful photography studio can be expensive. Equipment and marketing can cut into cash flow, making it difficult to meet day-to-day obligations. However, there is a way to shore up cash flow and meet your business goals.

SmartBiz Loans works with customers across every industry, including photography. Read on to learn about a real photographer who came to SmartBiz for low-cost financing.

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Successful photography business funded fast with an SBA loan

Derrick Bryant Photography, owned by Derrick Bryant, is a photography studio successfully expanding with low-cost funding from a bank in the SmartBiz network.

To spark growth, move into a new space, and purchase equipment, Bryant initially went the traditional route for a small business loan.

“I went to a bank and it was very difficult for me. I gave them all of my documents showing them where I started and where I am now. I explained that I needed funds to move into a studio or I could potentially go out of business,” he says. Although he was prepared and financially stable, the bank lowered the requested amount and ultimately said they couldn’t approve the loan.

Bryant is well connected in his community and asked for advice from another small business owner who had recently opened a new location for her bridal shop.

“At this time, I’d been trying to get funding to grow for years. Another business owner in the community told me about SmartBiz so I checked it out.”

Bryant worked with his accountant to pull together the requested loan application documents and uploaded them to the secure SmartBiz online platform. Bryant secured an SBA loan through a SmartBiz bank partner with low rates and a 10-year term.

Funding options for photography studios

Although SBA loans are known as the “gold standard” in small business financing due to low rates and long terms, there are other options available. Here’s information you need to know before you apply.

There are three types of SBA loan programs available for photography studio businesses, the 7(a) Loan Program, the CDC/504 Loan Program and the Microloan Program

The 7(a) Loan Program

An SBA 7(a) loan can be used for a variety of purposes to strengthen a photography studio’s bottom line. Acceptable uses of proceeds include:

Working Capital – Purchase equipment, increase inventory, add marketing programs, use for operating expenses or hire additional staff.

Debt Consolidation Loans – Refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans, or business credit cards.

Commercial Real Estate – Refinance an existing commercial real estate mortgage, buy an office building or other owner-occupied commercial space.

For in-depth information about the popular SBA 7(a) loan program, visit the SmartBiz Small Business blog and review our comprehensive article: What is an SBA Loan?

The 504 Loan Program

This program was created to give small businesses low cost funds for expansion or modernization. Typically, up to 50% of project costs are funded by a lender backed by the SBA. CDCs (Community Development Corporations) usually fund up to 40% of the project cost. The final 10% is a cash down payment expected to come from the small business owner. A 504 SBA loan might be a good fit for small business owners interested in purchasing a commercial real estate property and if their unique business circumstances fit with the public policy goals of your local CDC. Find a CDC here.


The Microloan Program

The Microloan Program is for very small businesses, including start-ups and provides loans of up to $50,000. Requirements to qualify for a microloan can vary depending on the lender. Proceeds from an SBA Microloan can be used for most business expenses but not for paying down debt or real estate purchases.

Non-SBA Loans

There are plenty of non-SBA loan options available for photography studios although they may have higher rates, shorter terms, and larger payments. These types of loans are a fit when you need funds fast, are seeking high-interest debt refinance, or want to build credit for a more affordable loan.

Business Lines of Credit

A business line of credit allows you to borrow funds up to a limit based on your credit, typically smaller than a term loan. You only pay interest on the amount you use, and you can continue borrowing as necessary until you reach the set maximum. These loans are usually unsecured, meaning that you won’t have to provide collateral to qualify. For in-depth information, read this post from the SmartBiz Blog: Small Business Lines of Credit Pros and Cons.

Business credit cards are revolving lines of credit. The main distinction is that they don’t terminate once the predetermined limit is reached. They work like personal credit cards, with varying spending rewards and offers depending on the lender. Learn more here: 5 Business Credit Card Myths.

Merchant Cash Advances

A merchant cash advance (MCA) is most often used by small businesses that accept credit and debit card sales. You receive a specific sum in advance that is repaid either by a percent deduction from daily transactions or through daily or weekly payments.

Keep in mind that MCAs often lead to extremely high annual percentage rates. Even the minimum within the range can be several times larger than term loan annual percentage rates and can reach up to well over 300%.

Bank Term Loans

Bank Term loans are term loans meant to be repaid in a shorter amount of time than the 10-year term of a typical SBA loan. This type of loan can be a great way to get the funds you need to successfully grow or maintain your business. SmartBiz currently offers term loans through its network of banks for working capital, debt refinance and new equipment purchase. Here are the basic details:

  • $30,000 to $250,000 loan amounts
  • 2 – 5 year repayment terms
  • Fixed interest rate*
  • Monthly repayments
  • No pre-payment penalties

*Interest rate depends on loan term and the applicant's credit and financial profile.

When should I consider getting a business loan?

If you have an opportunity to expand by shoring up cash flow, purchasing or replacing equipment, increasing marketing, or lowering monthly obligations with debt refinance, a business loan can help. Here are questions to ask yourself when comparing financing options:

  • Do I meet the financial requirements?
  • How much do I want to borrow?
  • When would I like to repay the loan?
  • Is there a prepayment penalty?
  • How much am I willing to spend in costs?

Take a look at your business plan to help answer these questions and determine the best use of funds.

Am I eligible for a small business loan?

Each lender will have different requirements depending on the size of the loan and your financial profile. Here are questions to address:

  • How long have you been in business?
  • What is your personal credit score? (the higher your score, the lower your rates will be)
  • Can you make loan payments for the life of the loan?
  • Are you a legal permanent resident or U.S. citizen?
  • Do you have any foreclosures, bankruptcies, or tax liens?

Ready to apply?

SmartBiz Loans is a one-stop-shop for the funding needs of small business owners. In addition to SBA loans, banks in the SmartBiz network offer Bank Term loans. If these aren’t a fit, the SmartBiz financial experts will work to find you the right funding for your unique business.