If you are ready to grow your business, a business loan may be the best option. This will help you have some cash on hand to get your business running. There are a variety of loan types that you can choose from, including the following:
An unsecured loan is one of the easiest choices to obtain if your loan amount is smaller. You can apply for the loan quickly and even get a decision that day. You do not have to put up any collateral, so you won't lose your property if you default. The application is streamlined, much of which can be done online. You can have the payments deducted directly from your bank account and come with a manageable payoff schedule.
Another option is a secured business loan. This uses the assets of the business as collateral to get money from a lender. This is a good option for one-term expenses that need a longer time to finance. You can borrow into seven figures and are best for established businesses with a large expense. Your collateral does not have to be a piece of real estate, contrary to popular belief. These loans also often come with a lower interest rate than unsecured.
Line of Credit
A business line of credit is another option. This is not a loan by definition, but a line of credit that provides you with the ability to use it as you need it. The difference is once you pay off your line of credit, you can use it again and again until it is closed. You will receive a lump sum of cash and repay the credit line in installments.
Your line of credit amount can be a certain limit, where you can withdraw business loanas much as you need for any specific project. You only pay interest on the amount you actually withdraw.
You will have a fee to take out a business line of credit along with a renewal fee each year. The interest rate is variable and will largely be based on the prime rate. Your credit score and financial standing will also be evaluated. Your lender may require that you be in business for a certain amount of time before extending the line of credit to you. A line of credit is beneficial because you can quickly take care of expenses without needing approval for a loan and can easily fund your short-term business needs.