Need a Business Loan? Study this Loan Guide to help you decide what Type of Business Loan you really need.
Running a business can sometimes be very difficult. You might be in need of renovations to give your business a fresh, new, welcoming look, or the equipment decided it is time to take a break; many unforeseen things can happen and most likely you will not have the cash lying around to fix it. That is when you will consider a business loan.
Considering taking out a loan, you should do a bit of research on what type of loan will work best for you and your business and the situation you are in. There are quite a few options to choose from and just as many different types of financial institutions that make funds available.
Even when a bank will not provide a loan to you, you now have more options available to explore.
Types of Business Loans:
- Term Loans; this is certainly the most known type of loan. You receive a lump sum loan, plus interest, which is then paid back over a pre-arranged term. You can consider applying for term loans at any bank or online financial lenders.
- Equipment financing; this type of loan can finance the cost of new, or used, equipment and machinery, up to a 100%. The collateral on this type of loan will be the equipment itself.
- SBA Loans; these loans have flexible terms, are low-cost and secured. Traditional banks, as well as online lenders, offer these loans.
When you have already been in business for many years, you stand a better chance of getting a loan. Your loan will also be more affordable. The reason for this is basically the fact that you have proven that you and your business can survive the ups and downs. Lending institutions now will feel more confident about you paying back your loan.
The cheapest and most affordable loans are still the ones offered by your local bank. There are much more variations on the loans mentioned above. You can also try online lending where you will find still more options for funding. Some of these might be very expensive. But the big difference lies in the fact that they come in many shapes and offer lots of different sized loans.