Get a New Business Loan Summary: Understanding Your Options and Terms and Requirements

It is no secret that business financing is not easy. Business loans carry great risk to the lender, resulting in strict eligibility requirements. Although it is challenging, it is not impossible to obtain loans for new business ventures.

It helps you understand the different types of loan options available. There is the small business line of credit, which generally has a limit on the amount of funds you can access, although it is useful for managing a business’s cash flow and unexpected expenses. There may be a fee to establish this line of credit, but there is generally no interest charge until you actually withdraw money from the funds.

There is also the working capital loan, which is essentially a borrowing vehicle used by the business to finance its day-to-day operations. Some of these types of loans are unsecured, but newer businesses with little or no credit history will have to offer something as collateral.

If the main reason you need to get a new business loan is for equipment, you may be interested in an equipment loan. Keep in mind that you will likely still need to make a down payment, usually around 20% of the purchase price. The equipment itself is the collateral on this type of loan, so if you can’t pay it all back, you will lose the equipment. The principal is generally amortized over 2-4 year periods.

Get Specific Purpose New Business Loans

Small business term loans are those that are generally established for a dollar amount and are used for a variety of things, such as capital expenditures, business operations, expansion, etc. Interest must be paid monthly and principal must be repaid between 6 months and three years. This type of loan can be unsecured or guaranteed, and the interest can be fixed or varied. This is a good option for small businesses that need capital for growth or large one-time expenses.

Small business credit cards are available if your credit score is good enough. Interest rates vary based on your credit score, the lender, the amount of the card, etc. Many of the insurers require that the primary owner be co-responsible with the business. On some cards, there are cash back and rewards programs.

Additional options include:

• SBA-backed loans

• Angelic Investors

• Crowdfunding (peer-to-peer financing)

• Online direct lenders

• Financing of accounts receivable

It is wise to research all of your options on how to obtain new business loans. The best place to start is with US Business Funding. This site will help you get approved with flexible payment and term options. US Business Funding has many positive reviews and has been featured in Forbes, CNN Money, Inc 500, and other prestigious publications.

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