The key in achieving the loan you need is persistence and knowledge on the different small business loan subcategories. It’s no secret that it has become increasingly difficult for small businesses to acquire a good small business lending source, but as a small business, it’s crucial to obtain the capital necessary in order to allow the business to grow where the capital is needed. There are a few great financing options specific to small businesses to help fund their necessary growth.
If you’re seeking to make a larger investment, consider a term loan. This type of loan is probably one of the most used financing options due to the benefits and easily comprehendible aspects. Just like a personal loan, this will include fixed interest rates and a monthly payment. A business loan will provide you with a larger sum of cash up front, making this type of loan great for larger investments that your small business needs. Once your business has been established for over a year, this loan is great for healthy and growing businesses. Some pros of a term loan are:
- A term loan can be acquired in as little as two days
- Set payment structure
- Suitable for a variety of business purposes
- Lower monthly payments than a short-term loan
For those looking to fund specific equipment for their small business, an equipment loan may be just what you’re looking for. Just like business loans, equipment loans offer fixed rates of interest and payment plans. This lending type includes transportation vehicles, machinery, and other tools necessary for your small business. Certain types of leases in the equipment loan field allow for you to improve the overall financial picture by conserving operating capital, freeing up working capital and bank credit lines for inventory, expansion, and emergencies. With equipment leasing, there is no down payment. The lease term can be accredited to the useful life of the equipment needed.
This specific loan type is more suited to established small businesses that own commercial real estate. A commercial loan allows you to borrow against the equity you’ve built within the business property. More borrowing power could be possible here depending on the sole value of the property and equity you have. Commercial banks have good interest rates and make the largest number commercial loans today, making at least 75% of overall commercial loans. For those established small business owners, this loan type is just right for those looking to grow their property.
If you have a small business and seek different ways to obtain the desired growth and expansion within it, knowing all of the financing options available to you will give you a better comprehensive strategy on the loan best suited for your business. With small business expansion, it is beneficial to the business as a whole if you take into consideration the present and future aspects of your business in order to obtain the best loan that will attribute to the business growth. Certain loans which are specific to the things you need for your business can end up saving you capital in more ways than one in the long run.