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If you’re a small business owner, then you may have heard the adage, “It takes money to make money.” Fortunately, the variety of financial assistance available to entrepreneurs today is greater than ever. This can be accredited to many small business loan companies available today. All you need is the right information and the guidance to know where to look, and you can have access to the capital your business needs.
Hence, it doesn’t take the knowledge of a financial expert to establish a successful business. All the resources you need to navigate the complex world of payment processing, and small business loan companies can be found here. This guide provides all the options small business loans at your disposal. Therefore, you can rest assured that you’re making the right decision for a better future.
A small business loan is one that small to midsize companies acquire without offering parts of their company or equity in return. Typically, small business loans are part of debt financing. What does this mean? That means that borrowers are obligated to repay their debt if they want access to further funds.
In other words, small business loans affect your ability to receive future funding. According to observations made from the various small business loan companies, there are many types of small business loans. Usually, a small business loan company will put together different packages to meet the needs of varying companies, based on sizes and capital requirements.
Hence, you can have loans like traditional installment loans, business lines of credit, or invoice financing. Depending on your financial situation, one type may work better for you. However, to determine the best loan package for your small business, you have to take into consideration different factors like your financial situation, business history, and assets under management.
So you’re looking for small business loan companies to secure loans for your business. Before you choose one of the best companies we’ve listed further down in this guide, we recommend taking some time to familiarize yourself with the different types of loans out there. With this knowledge, you’ll be a better position to determine the best loan to help solve the financial needs of your business.
Simply put, bank loans are business loans you obtain from any bank. If you consult your bank, you’ll find that they offer different types of loan packages to small businesses. Some of the common examples of bank loans include lines of credit, installment loans, and equipment loans. Often, these financial institutions offer some of the most favorable fees and interest rates.
However, this comes with a caveat. Their acceptance rates are quite low. Also, you might find their loan application procedures a bit long. Alternatively, many call bank loans traditional business loans or traditional financing.
Generally, business expansion loans refer to loans taken by companies to open new business locations and purchase additional office space. Often these loans come as installment loans, but you’ll find that some company chooses to use lines of credit instead. Usually, this is the case when such a business isn’t sure of the total cost of the expansion project.
As the name implies, these are loans used primarily for buying new equipment for your business. Typically, you’ll be able to secure about 80% of the amount the equipment costs from the lender. You will have to provide the funds to cover the remaining 20% some other way. Equipment loans serve as viable options for leasing working equipment or paying out of your pocket.
Another name for this type of loan is term loans. These loans have predetermined and fixed payment schedules. According to the schedules, borrowers have to make regular installments for a duration of time until they’ve repaid the loan in full. Usually, small business loan companies offer between one to 10 years for borrowers to repay these loans. However, you can get shorter or longer payment terms from some lenders.
In some cases, installment loans are also called short-term loans. Usually, the payment period for short-term loans is no more than two years. Also, there are called medium-term loans if the payment term is between two to five years. Then six years or more are referred to as long-term loans.
These are loans you back with unpaid invoices. In a sense, the term Invoice financing is a catch-all term. If you face some financial troubles in your company that are caused by cash flow problems due to unpaid invoices, invoice financing should be the best loan option for you.
These are loans that give you access to a credit facility through which you can obtain funds every time your business needs them without the need to make separate applications on every occasion. This is the ideal choice of loan for your business if you have occasional cash flow problems. Also, if you occasionally have to deal with unforeseen expenses in your business, a line of credit might be what you need.
It’s convenient because you don’t have to apply for a loan every time you need to access funds. After all, time is money.
This is yet another popular option for small companies. Also, the online loan goes by other names such as an alternative loan or marketplace loan. Due to the operations of a number of non-bank lenders making easy and fast lending decisions using technology. You can obtain loan products like short-term loans, lines of credit, installment loans, and several other types from individual online lenders.
Usually, it takes about two weeks or less to obtain funding from online lenders.
SBA loans usually come from banks. However, the application goes through a small business association instead of a bank. Also, a portion of the loans is guaranteed by the SBA. Hence, these types take less time to get and have higher acceptance rates.
These loans differ from other loans such that, the lender calculates the interests based on the original sum you borrowed. Usually, you have to repay them in full within two years. However, you can find some small business loan companies that extend payment terms to three years.
As the name implies, these are loan facilities available to entrepreneurs who use them to finance startups. Naturally, startups are risky businesses. Hence, you will find a few small business loan companies that offer these loan packages. However, you can get the list from our small business loan reviews to find a company that offers startup loans.
Working capital loans help small businesses with cash flow difficulties to cover the cost of operating their business. However, you need to determine if you’re eligible for such loans before you’re in dire need. Because, while your funds are tied up elsewhere, you may not have the luxury of time to go through lengthy approval processes.
Below, you’ll find the four main factors lenders use to determine if small businesses qualify to receive loans.
Below, you’ll find our roundup of some of the top small business loan companies available in the financing market. For a full review of these companies, follow PaymentProcessing101 blogspot. We regularly post comprehensive resources on merchant companies, payment processing gateways, and loan facilitators for small businesses.