Whether its big business or small business, finance is the key factor for a business growth. Big businesses are referred to as big businesses because those businesses made quite an impact by creating a position in the business world. When it comes to business loans, it is required and sought after by the small business owners most. Thus, small business loans are often sources of traditional and alternative lenders.
Easy small business loans can help your business grow by covering all your important business needs. Small business loans help your business to an expanding of new territories, enhancing sales and increasing cash flows and allowing you to hire more employees and even much more.
Are you that small business owner who desperately needs easy small business loans? Well, for a businessman like you we have rounded up the list of different types of small business loans and how to avail those.
A business line of credit- A small business line of credit is the arrangement of funds between the financial source and business owner. This funding source is subjected to credit review which revolves like a credit card where the interest begins to accumulate after withdrawing funds. After the withdrawing of funds begins the lender sets a limit on the amount which you are supposed to borrow. The interest is basically paid monthly and the drawn principal is amortized over the funding terms.
- Merchant cash advances– Merchant Cash Advance is referred to an advance small business credit card receipts, rather than a small business loan. MCA is one of the innovative ways of business funding which is slightly different than other business loan funding systems. This is quite a new concept which came into existence before few years. But, when it comes to a small business loan, it is quite popular among most of the business owners. This is, in fact, falls in the category of a secure lending system which can be acquired by evidencing many business assets and it’s good for those who have a pretty volume of card transactions every month.
- Working capital loans– A working capital loan is acquired with the purpose of financing the daily operations of a business. These loans are basically not used for long-term business purposes or investments, wages etc. Companies which have seasonal needs highly rely on working capital loans to cover up daily needs of a business. Working capital loans are meant for short-term loans of about 1 month to 1 year.
- Small Business Administration loans (SBA) – SBA loan is applicable for real estate companies which are provided by banks and big financial companies. These types of loans offered with low-interest rate and favorable repayment terms, because it is backed and guaranteed by U.S Small Business Administration. That’s this loan is referred to as SBA loans. This particular loan was formulated and implemented to encourage small business holders to make a better world of business.
- Small term loans– Short or small term loans are essentially provided for a short period of time of less than one year. Short term loans are preferred by those business owners who need short-term financing. This is one of the most popular and fastest loans which are granted by online lenders. The short-term loan is highly beneficial for purchasing inventory and other supplies, extra cash flow, and covering other business expenses. These types of loans are provided by private finance companies such as online lenders or banks. The term loans can be secured and unsecured as well and interest also varies based on different loan lenders. You can apply for a short-term loan as an individual or as a business company. The loan will be approved by looking at your credit history. However, one advantage of short-term loan is, it needs minimal paperwork and can be issued in a day depending on the company’s policy.
- Equipment loans- Equipment loans can help business owners to acquire pieces of equipment which are necessary for a particular business. An equipment loan is a great way for companies that want to grow their revenues with a piece of machinery. These loans can be used to replace existing types of equipment for the growth of a small business. Collectively, the loan can be used to make large purchases like large vehicles, farm equipment, software, large commercial printers, healthcare equipment, large construction vehicles, restaurant equipment and much more.
- Accounts receivable financing- An accounts receivable financing is a line of credit which is granted by the company’s accounts receivable capability. These types of loan help companies free up capital of the unpaid debts.
- Bank term loan- When it comes to banking loan, this is the most common and preferred option of loan funding for existing businesses. A bank term loan is a form of a loan that offers a specified repayment schedule on a certain low rate of interest. This bank term loan is good for business owners who have great credit but in need of a big funding for expanding their business such as buying real estate, investing in another business etc.
Nevertheless, to claim all the above-mentioned loans, you have to provide all the detailed information and documents about you and your business. Because a loan is a matter of huge paperwork and no one will provide you with a huge amount of loan if you do not provide genuine and necessary documents. To make your process easy, we have pinpointed some information which is required for the type of business loan you want to acquire:
- Name of the company’s head and business
- Federal Tax ID
- The legal structure of the business
- List of company’s executive officers
- The total duration of your business
- Financial statements of your business which involve the updated one
- State filings of the company
- The license of your company and insurance policies
- Amount of loan
- Business bank statements.
Bottom line- A business comes with lots of responsibilities, tasks, and people. But, money is the most important factor in the growth of business and creating a position in the business world. Therefore, business loans are the endless demanding source for funding of the business.