You’re sick of not having enough money to splurge, but your business doesn’t let you take a salary. Maybe you need working capital to expand your business, or maybe you need funds to pay more employees. Whatever your reason, there are plenty of funding options out there for small businesses. But no one loan is right for every business. The right loan for you will, of course, depend on what you need the money for and how quickly you can repay it. To help you pick the right financing option, we’ve made a list of the most popular types of business loans.
Term Loan
A term loan provides an upfront lump sum of cash that you’ll need to repay over a set period of time with interest. Online lenders can provide even faster funding for small businesses than banks. You can use this flexible financing option to purchase tools, equipment, and real estate for your small business.
SBA Loan
SBA-backed loans can be used for a variety of purposes. They might be used for working capital, to buy equipment for your business, or to purchase real estate property. Repayment periods on SBA loans are typically longer than other loan products. These loans are essentially guaranteed by the Small Business Administration, so the rate of interest is usually lower than traditional loans.
Personal Loans
A personal loan is a good option for startups, as many banks typically don’t lend to businesses with no operating history. These loans are ideal for funding business expenses because they are based solely on your credit score. A good credit score will help make the process of getting approved easier; bad credit often means a higher rate or even denial.
Business Credit Cards
Business credit cards are funding options designed to help you manage your ongoing expenses. You can draw from the card as needed, as long as you make minimum monthly payments and don’t exceed the credit limit. If you do run into financial trouble, most business credit cards offer reasonable redemption terms — from six months to a year — during which time you can pay down your balance interest-free.
