There are so many business loans you can choose from. They vary from business lines of credit to invoice factories to merchant cash advances. All these particular places you borrow loans from have their advantages and disadvantages. The right category depends on when you need money and what you need the money for. If you have a small business, you can easily get a business loan to finance your day-to-day needs. Every loan product has unique qualifications, requirements, interest rates and terms.
Where can I get a Business Loan?
Whether you are In Texas and want a Texas business loan to purchase equipment, buy real estate, inventory or just need work capital, there are various companies to go to for help.
Types Of business loans and their advantages and disadvantages
- Term loan
A term loan is the most common form of business financing. When it comes to term loans, you are given a huge amount of cash upfront, which you repay with interest over a predetermined period. Online lenders usually offer term loans up to $ 1 million and can also provide faster funding than banks that offer small business loans. Term loans are great for businesses that want to expand and for borrowers who have excellent credit and a strong business that don’t want to wait long for funds.
- You get cash upfront that you will use to invest your business with.
- Allows you to ask for more cash than other types of loans.
- Funding is quicker when you use an online lender instead of a traditional bank.
- May need a personal guarantee or collateral.
- Costs can differ and are not the same for online lenders and traditional banks.
- SBA loans
SBA loans stands for small business administrations that offer loans to small businesses. Banks or lenders usually offer SBA loans. When it comes back to paying the loan, it will depend on how you plan to use the money. They range from seven years for working capital, ten years for buying equipment and twenty-five years for real estate purchases. SBA loans are great for businesses looking to expand or refinance existing debts and for strong-credit borrowers who can wait for a long time for funding.
- SBA loans offer the lowest rates in the market.
- You have a chance to borrow up to $ 5 million.
- Repayment terms are long.
- It’s hard to qualify for the loan position.
- The application procedures are long and rigorous.
- Equipment loan
When you want to buy equipment for your business, you need to get an equipment loan, which sometimes includes semi-truck financing. The equipment loan’s term depends on the life span of the equipment you are purchasing, and the equipment acts as collateral for the loan. Rates will also depend on the value of the equipment and the strength of your business.
When starting your business and you don’t know where you will get a mortgage or a loan from, look into the suggestions listed above, and the one that resonates with what you are looking for, go for it.