There are many forms of small business loans to choose from. The choices range greatly depending on the amount of money you need, the amount of time you need the money for, and even the specific terms of your loan. Here are some basic, small business loans options: Small business line of credit. Accounts Receivable financing. Bad credit loans.
As you research the many different forms of small business loans to find the one that best fits your needs and the ones that offer the most competitive interest rates, you will want to consider how you will use the money. Some of these loans can be used to make purchases. Others may be used to help grow your business. Still others may be used as personal credit enhancement tools.
To get small business loans from alternative lenders, you will first have to secure them. One of your first stops should be your local bank. Ask a loan officer for options and details about securing small business loans from alternative lenders. Be sure to ask how much risk is posed by using outside lending sources and how much they would charge in interest if you defaulted on the loan.
You can also look to working capital loans with banks. Working capital loans are available for short-term periods of time – usually between one month and three months. However, you can also look to other places for long-term working capital loans as well. Check with your state’s regulatory agency to find out which lender or lending institution will be the best option for your working capital needs. Keep in mind that small business loans like this will usually carry a higher interest rate than traditional personal loans.
You may want to check to see what your state has to offer in the way of small business loans as well. While several states do not specifically regulate this type of lending, several others do have specific laws in place that may help you. Most state laws allow a small business loan to be based upon a percentage of a company’s revenue or net income. In order for this type of loan to be valid, certain stipulations must be met. You will want to talk to a loan officer to find out how things like this work.
There are also several online lenders that offer small business loans. This can be helpful for you, because it gives you the chance to shop around from among several lenders and find the best deal that fits your needs. Often, these lenders will allow you to apply for your loans online, which means it can be done in a matter of minutes rather than hours. Of course, because you are dealing with online lenders, you will not have the opportunity to meet face-to-face with any of them before making your decision. You may want to use this time to talk to an sba loan officer to find out more about these loans and whether or not they are right for you.
When you work with one of the many peer-to-peer lending sites, you will be able to access some very affordable small business loans, without ever having to go through a traditional lender. The good news is that there are usually no fees associated with working with these peer-to-peer lending sites, so you will save money in the long run. Also, most borrowers of these loans are able to get the funds they need in a matter of weeks, making repayment much easier than with traditional lenders.
You can also work with your current lender to get small business loans, but you may not get the best terms or interest rates. For instance, your current lender will most likely want to see your credit score if at all possible, so that they can assess the risk of lending you money. A lender may also look at the value of your collateral and make a determination as to whether or not you are worth it. If your credit score is low, then your interest rate may be higher, while if you have a great credit rating, then you may get better terms overall. However, your lender may be willing to work with you to ensure that you get the best rates on your loan; so even if you have poor credit, your lender may still be willing to work with you, because they can ensure that you will repay the principle rather than paying extra interest.