Types Of Small Business Loans And How To Secure One
Helpful Tips about Small Business Finance
Whether you are looking to grow an existing business or start a new one, you’ll need money to get started. However, not everyone can finance a small business straight from their own pockets. This is where small business loans come in handy.
Small business loans can be used in a number of ways including, purchasing inventory and equipment, funding day-to-day expenses, marketing, meeting payroll, business expansion, business acquisition, funding working capital, and refinancing other debts among others.
Types of Small Business Loans
Different types of small business loans are designed to suit the needs of different businesses. Before heading out to search for a business loan, it would be wise to first learn about the available options in order to make an informed decision.
Term Loans – With this type of loan, the borrower is provided with a lump sum of money which is to be repaid in equal monthly instalments over the life of the loan.
Lines of Credit – This type of loan allows the borrower to draw off a revolving line of credit and is to be paid within an agreed period of time. This type of loan is flexible and can be used for emergency expenses and for seasonal cash flow needs.
Business Credit Cards – This type of financing allows the borrower to draw money from credit cards within the allotted monthly limit. Borrowers are not able to draw amounts exceeding this limit.
Online Loans – These types of loans usually charge higher interest rates compared to other types of lenders. However, they offer those with poor credit a chance to secure loans for their businesses.
How to get Small Business Loans
The amount of money one can get with any loan will usually depend on the credit profile of both the business and owner. Before offering loans, most lenders will look at factors such as;
Owner’s Credit Score – A good credit score serves as an indication that you can be trusted to make the loan payments on time.
Business Credit Score – Just like business owners, a business is also issued a credit score which will be used to evaluate its ability to make payments on time.
Owner’s experience and Resume – Finally, lenders are interested in seeing a client’s business grow so as to make a profit from the loan repayment. For this reason, they want to make sure the owner is competent and educated. The more competent the owner, the easier it is to secure loans with attractive interest rates.
If you need help in securing a small business loan, contact FinanceCorp. Their goal is to make the process as easy as possible and find you the right loan for your needs by using their network of over 25 reliable and reputable lenders. When you choose to work with FinanceCorp, you are assured of working with a qualified expert who knows the industry and will work tirelessly with you to get you the best possible mortgage.