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Planning to Procure Business Loans for Your Company? Here are the Types to Consider

— March 28, 2024

Term loans, business loans, and credit lines are solid sources of working capital.

Small business entrepreneurs often worry about how to find the best loans to fulfill their dreams. About $1.2 trillion is borrowed by small business owners every year. Average small business owners have access to multiple good sources for taking small business loans. It all depends on choosing the best one that fits your criteria.

Some of the business lenders provide small business loans at flexible repayment modes. We can help you decide the best funding methods that fit your agenda.

Let us discuss the multiple-finding process available for small businesses.

  • SBA loans

These are specifically designed for small businesses and are issued by banks and participating lenders. They are partially guaranteed by the US Small Business Administration. The lending standards are quite complicated and tight. But the interest rate is on the lower side, and repayment terms are quite flexible. This makes it the best loan option to fund startup companies and meet expansion expenses.

  • Small business term loans

Business owners take the term loan for a specific tenure. Regular payments must be made for a set interval, which usually varies from one year to ten years. There is no fixed rate of interest for term loans. Thus, borrowers need to return more money. This is a lucrative option for expansion and new businesses because the long repayment time allows them to increase their profit levels. Moreover, this loan is undoubtedly suitable for business owners as it enhances their capital and expands their capabilities. However, a floating or compound interest rate sometimes increases the amount needed to be returned.

Students working at a table with coffee, notebooks, and laptops; image by Startupstockphotos, via
Students working at a table with coffee, notebooks, and laptops; image by Startupstockphotos, via
  • MCA or Merchant Cash Advance System

This system can be defined as a short-term financing of small business funds provided by alternative financing companies for a specific percentage of the future cash flow. The MCA providers can withdraw a daily payment until the amount is repaid. The loan application process for MCA is simple, and financing can be received quickly. Businesses can get the required money within 24 hours.

  • Small business line of credit

A Line of Credit loan can be a good monetary source for small businesses. Instead of giving a bulk amount, it provides credit to businesses as per requirements, followed by a repayment option within a specific timeline. As compared to other loans, it offers the most flexible option for borrowers. Further, owners can borrow between $1,000 and $2,50,000.

  • Revenue-based financing

With the Revenue-based financing system, fund providers or investors prefer to invest their capital in businesses in return for a fixed percentage of the gross revenues. This will continue unless the interest and invested capital is completely repaid. Usually, 3 to 5 years are provided to borrowers for repayment.

To take flexible business loans from Fund&Grow, you need to follow three steps: speak with one of their expert counselors and complete the online application with a mouse click. Then, you need to read and accept their terms and conditions. Lastly, you will get the loan within a day or two at most.

  • Working capital

Term loans, business loans, and credit lines are solid sources of working capital. You can even consider a debt consolidation loan to receive the funds you need to continue your business.

When looking for the best sources for funding your small business, you can get help from professionals. It would help if you considered many criteria before finally settling on the best option.

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