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Startup Business Loans
Getting the right business loans when you are getting started can help you ensure your success and decrease your stress in the early days of your business. When you are just starting as a business owner, you have to put a lot of money into your new business. These are a few important kinds of loans to look into as you start your business.
Lines of Credit
Getting business lines of credit set up for your business can help you to be more successful and prepare you for the smaller expenses that your business will incur. According to US News, getting lines of credit for things like office supplies and everyday business expenses can help you to take care of those expenses and build credit for your business. You can get a line of credit through a bank, credit union, or even an online lender. Make sure to pay attention to the interest rates and terms of your credit as you sign up for business lines of credit.
How Does a Business Line of Credit Work?
Most business lines of credit are revolving credit. Somewhat like a credit card, a business line of credit gives you a set credit limit up to which you can borrow. You can either carry the balance, making at least the minimum payment each month, or pay it off in full; interest accrues only on the amount you borrow.
As you pay back the funds you’ve borrowed, a revolving credit line lets you borrow more without having to apply for a new line of credit. There are, however, business credit lines that do not allow you to revolve debt; these require you to reapply after you’ve paid back what you borrowed.
Business loans through the small business administration are another great option that can help your small business to get the funds it needs. According to Franchise Gator, one benefit of SBA loans is that they’re backed by the government and can offer very competitive rates. Though there are specific qualifications you will need, many small businesses can benefit from this type of loan. If you meet the qualifications for a small business loan, this type of funding offers a lot of benefits and can help your business get off the ground fast.
What is an SBA 7(a) loan?
The SBA 7a Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can also be used for:
- Short- and long-term working capital
- Refinance current business debt
- Purchase furniture, fixtures, and supplies
The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates. Your lender will help you figure out which type of loan is best suited for your needs.
According to Nav, one of the major expenses of starting a business is getting all the equipment you need to make things work. Luckily, there are specific loans available that can help you get all the equipment you need. Equipment financing loans are made to help small businesses purchase necessary equipment, and these kinds of loans are offered through specific equipment lending companies and general lenders. If you have a lot of equipment to purchase for your business, it may be worthwhile to get an equipment loan to help you with your business and give you the things you need to get things started on the right foot.
Getting the business loans you need can help you to start your business well and to decrease your stress while you get everything running. With these kinds of funding, you should be in great shape to get your company on the map.