You can’t always judge a book by its cover. It applies to business loans, too. There is more than one type of loan you can use to make your business grow.
In fact, you’ll want to make sure you research plenty of options because a seemingly good loan can have hidden fees that cost you more in the end.
Want to know what types of loans are available today? Then read on. We’ll show you the different types of business loans that can help you and your company thrive.
Term Loans
By taking out a term loan, the borrower can expect a fixed repayment schedule over a determined payment period. This type of loan typically comes with a fixed annual rate. It has loan terms that can range anywhere from 1 to 25 years.
Businesses must have solid credit to be approved for term loans. They must demonstrate they have the financial ability to repay the loan on time. Depending on the institutional lender, businesses may also need to provide additional collateral to secure the loan.
Additionally, term loans often require the borrower to pay origination fees on top of the interest to cover the lender’s administrative costs.
SBA Loan
Yes, there are different types of Business Loans, and SBA Loan is one of them. It stands for Small Business Administration Loan, and it can be used for a variety of purposes, such as:
- starting a business
- buying an existing business
- improving a current business
An SBA Loan is a federal government-backed loan that provides small business owners with access to capital and other favorable terms in comparison to other business loan types. The most popular SBA loan program is the 7(a) loan program.
It is designed for businesses that are unable to obtain finance from a traditional bank. The SBA Loan is a great option for those looking to finance their business as it comes with the following:
- a higher approval rate
- lower down payment
- longer repayment terms
Additionally, the SBA loan program participates in preferential interest rates for small businesses. This type of loan can be used for a variety of reasons. To help you with your SBA loan payment, you can check out this link to help you out with your payment.
Microloans
Microloans are small business loans that are offered to entrepreneurs and small businesses. They are typically smaller than traditional business loans and are often used to finance start-up costs, such as marketing and advertising, purchasing equipment, or hiring employees.
Microloans may also be tailored to meet the specific needs of certain businesses, such as new businesses, women entrepreneurs, or minority-owned businesses.
Understanding the Different Types of Business Loans
Business loans offer incredible benefits for small, medium, and large businesses. There are many types of business loans with varying requirements, so business owners should pay close attention to the details before incurring them.
By researching the different types of business loans available, business owners ensure the loan is best suited to their needs and financial capabilities. Get started today to discover the best loan for your business!
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