Are you in need of a business loan to make all your dreams come true?
You shouldn’t let the lack of funding get in the way of your business. To help you with this issue, we put together this guide.
Keep reading to learn which type of business loans is right for you.
Types of Lenders
If you’re a business owner in the market for a business loan, then you need to be aware of the types of lenders available to you.
Small Business Administration
The Small Business Administration or SBA is a great place to start because they offer several business loans for owners who meet the different types of criteria.
Although some think obtaining a loan from the SBA is like getting a loan from the government, this is not true. What the SBA does is set a series of guidelines to their partners which includes many banks and other community lending institutions.
For those looking for low-interest rates, a business loan from a bank might be the perfect solution. These loans get processed in half the time it takes to process a SBA loan.
On the downside, it’s a lot more difficult to get a loan from a regular bank.
For business owners who don’t have a long credit history established, an alternative lender might be the solution.
These lenders are typically less strict in their loan requirements. Business owners can fill out this application on their own online and get a decision in about 5 days.
Types of Loans
Not all business loans are created equal. There are different types of loans to fit your needs. For example, LittleLoans also offers other loan alternatives.
Installment loans are pretty straight forward. You pay monthly installments covering both, the interest and the principal at the same time.
There is no penalty for paying your installment loans early.
An equipment loan is a great alternative when a business needs to purchase new equipment to continue to grow or to replace old and damaged equipment.
Equipment loans tend to offer good rates but they might require the equipment as collateral.
Balloon loans work as a type of installment loan except, you’re only required to make payments towards the interest during the lifetime of the loan. Once the term comes to an end, you must pay the interest in full.
This loan is a good option for those businesses waiting on a big payout from clients.
Line of Credit Loans
A line of credit loan works similar to a credit card. You have access to a certain amount of credit and you can use it as you see fit to make small business-related purchases such as travel expenses.
You only pay interest on the amount you borrowed.
Type of Business Loans: The Bottom Line
Although there are many options, there’s only a type of business loans right for you. The key is to identify the ones that fit your financial needs.
Before you settle on a loan, make sure it’s the right for you.
Did you find these tips helpful? If so, we have more where these came from. Visit our blog for more business finance tips.