Small Business Loan

So, what is a small business loan? Simply put, a small business loan is any funding option specifically designed for a small business. Small business loans allow existing or startup companies to borrow money from various lenders. Various loan types exist to help entrepreneurs meet different goals. The way each loan works depends on the type of loan. There are many business loans on the market and it can be beneficial to go over just a few of them.

• Term Loan - A standard bank-type loan. You receive the funding and pay off the principle plus interest over time.
• Equipment Financing - An excellent way for a growing business to get an edge. You receive the equipment upfront and pay it off over the life of the equipment.
• Accounts Receivable Financing - If you have large amounts of outstanding invoices, you can borrow against them. The invoices act as collateral and AR Financing offers lower rates.
• Merchant Cash Advance - A merchant cash advance is borrowed against future credit card sales. A borrower then pays back a percentage of daily CC sales to the lender. So, you never have to see the payments!
• Business Line of Credit - A business line of credit works just like a non-physical credit card. The owner of a small business is extended a line of credit and is charged the interest only or what is spent.

Benefits of Small Business Funding

So, what type of funding do you need? Wondering “where can I go to get a small business loan for a new business?” Small business loans can help you reach many of your business goals. They can help you keep control of your profits and business, avoid problems with loans from family or friends, and protect you from putting your personal assets at risk. Your need for capital will vary from smaller, short-term financing for purchasing equipment, buying new or additional inventory, and leasehold improvements to more extensive, longer-term loans for expansion projects and growth. At other times you may only need a simple line of credit to purchase products and services, meet payroll, or finance accounts receivable. CB Insights reported 29% of businesses failed because they ran out of cash, despite the new options for small business loans.