Types of Loans You Can Get As A Business Owner

Most business owners, whether startups or have been in the industry for some time, have gone through the process of finding the right financing for their business. There are a lot of options you can choose from, as long as you have the complete qualifications. Nonetheless, there are 5, easy-to-apply, basic loans you can get as a business owner and we will discuss them in this article.

The Importance of Knowing Your Funding Options As Business Owner

The first step in deciding which type of funding you should get is by knowing the need of your business right now. Are you a startup business looking for funding to start your business? Or perhaps, you are a restaurant owner who wants to maintain your cash flow and easily get funding to buy inventory?

Whatever the case, knowing what you need will help you narrow down your options and it will help your lender to determine which terms apply to you.

5 Types of Funding Available To You

We listed 5 basic funding programs that are easily accessible to most business owners, regardless of how long they’ve been in the industry. On each program, note how it can be useful to your business’ current financial situation. Let us know if you found the perfect program for you!

1. Working Capital Loans

This is a loan program that will help business owners acquire the funds they need to expand business operations, hire additional staff, or whatever else it is that you need. Depending on your need, you can choose to apply for it in the long or short term. These loans have a fixed interest rate so you will a calculated fixed amount to pay during your loan term.

Benefits:

• Easy to manage and added to an ideal budget

• Helps maintain good cashflow

• Helps your business gain financial strength during urgent or unexpected needs

Perfect for:

• Those in urgent need of fast funding

• Startups who don’t want to take up equity loans or offer collateral

2. Business Line of Credit

Having a line credit will help you easily access immediate funds at your own disposal. Instead of getting a large sum of money, having a line of credit will let you borrow funds multiple times whenever it is needed. For business owners who want to use funds to buy inventory or pay employee salaries, this is a great program for you.

Benefits:

• Helps build your business credit history

• Improves business adaptability, especially when taking advantage of an opportunity

• Helps to balance cash flow

Perfect for:

• Business owners who need to repeatedly purchase tools/items for their business

• Those who need to finance short-term expenses

3. Invoice Factoring

It is a funding option where you sell your invoices at a discount in exchange for a lump sum of cash. The factoring company/lender then owns the invoices and gets paid when it collects from your customers, typically in 30 to 90 days.

Benefits:

• It is a quick, safe source of cash flow by financing accounts receivable

• Less expensive than turning to equity investors

• A great substitute for acquiring an actual business loan

Perfect for:

• Those who find it hard to track down who owes you money to collect on the outstanding debts

• Those who don’t have such a great credit score

4. Equipment Financing

This is a loan program that will help business owners purchase the equipment/s they need for their business. For this specific business need, you are more likely to find better deals than going for a working capital loan. Whether buying brand-new equipment or replacing an old one, you are more able to manage your equipment by utilizing this program.

Benefits:

• Lower interest rates

• Less difficult to qualify than many other types of loans

• Lets you choose whether to keep equipment or not after payment ends

• Equipment will serve as collateral

Perfect for:

• Business owners who need to purchase essential equipment in industries like food services, construction service, trucking service,s and etc.

• Business owners who want to upgrade their current equipment

5. SBA Loans

The government has provided a number of business funding programs to help entrepreneurs of long-time business owners. We’ve listed a few of the programs offered by the Small Business Administration (SBA) in one of our published articles. SBA loans usually offer lower rates and good terms.

Benefits:

• Generous term lengths

• Lower interest rates

• Lower down payment requirements

Perfect for:

• Business startups who want to find lower funding rates

• Business owners who don’t mind waiting for funding to arrive

How To Choose The Right Financing For You

Looking for the perfect funding for your business can be challenging, but can be achieved with the right help! Further, you need to ask yourself the right questions to determine your current business need. In our previous article, we talked about how to choose financing for your business. We encourage you to check it out!

We are here to help you!

As a business owner, we urge you to take advantage of multiple information about business funding online. Research is very important, as well as business consultation. Most lenders offer a free consultation to help you determine which type of funding you need most.

Lendhalo is always ready to assist you in your funding needs! Feel free to contact us anytime and help will be on the way.

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