The Select Editorial Team works individually to review financial products and to write articles that our readers find useful. We may receive a commission from our partners when you click on links for products.
If you are a business owner looking for cash access, a small business loan can help. But it is important to choose the right type of loan. Choose the wrong loan, and you may be waiting for months to get it when you need it fast or on the wrong offer.
Small business loans can be given for specific needs, such as expanding your warehouse or starting a franchise. There are also loans that you can get when you have an unpaid pile.
Most small business loans are available through online lenders, banks and credit unions. Interest rates, payments, loan limits and terms vary depending on the type of loan, lender and borrower.
It is important to understand how each loan works, so you can choose the best option for your business. Below, select nine types of microfinance reviews that could benefit your CNBC company.
9 Types of Small Business Loans
1. Time loan
Time loans are one of the most common types of microfinance loans that can be repaid in one installment. Monthly payments are usually adjusted and include interest on the main balance. You have the flexibility to use a mortgage loan for a variety of needs, such as daily expenses and equipment.
2. SBA loans
SBA loans are attractive to business owners looking for low-cost government-sponsored loans. However, SBA loans are known for a long application process that can be delayed when you receive the money. It can take up to three months to receive and receive the loan. If you don’t want money fast and want to benefit from lower interest rates and payments, SBA loans can be a good option.
3. Credit Trading Lines
Similar to a credit card, credit lines generally provide borrowers with an indirect credit limit that can be accessed through a check account. You can spend up to the maximum loan amount, repay, and then spend more money. These options are great if you are not sure how much money you need because you only need interest payments on the amount you take. That’s about the amount of time you have to pay interest on the total loan – use part or all of it. Many credit lines are unpredictable, which means you do not need any guarantees.
4. Equipment loans
If you want to finance the purchase of large equipment, but do not have the capital, an equipment loan is something to consider. These loans are designed to help you pay for expensive machinery, vehicles or equipment such as computers or furniture. In most cases, if you are unable to repay the loan, the equipment you buy will be used as collateral.
5. Billing Factory and Billing Finance
Business owners who struggle to receive payments on time may want to choose billing or billing (account receiver finance). You can sell unpaid bills to the lender through the Billing Foundation and receive a percentage of the invoice value in advance. With invoice finance, you can use unpaid bills as collateral to get your balance in advance. The main difference between the two is that the factory gives the factory to buy your invoice, and finance still requires you to collect payments to repay the loan.
6. Commercial Real Estate Loans
Commercial real estate loans can help you finance new or existing properties such as an office, warehouse or retail space. These loans serve as temporary loans and can allow you to buy new business, expand space or renew an existing loan.
Micronutrients are small loans that can provide you with $ 50,000 or less. Because loans are relatively low, they can be a good option for new businesses or those who do not need a lot of money. To qualify for these loans, you may need to take out insurance (such as business equipment, real estate or personal property), but many microlons are provided by nonprofits or the government, such as the SBA.
8. Trader Cash Growth
Like traditional financial advances, merchant financial advances come at a high cost. This type of cash advance requires borrowing from your future sales. Instead of cash, you pay a portion of your daily credit card sales or weekly transfers from your bank account. While you can usually get a quick discount on high prices, high interest rates make this type of loan a big risk. Like Invoice Finance, merchant cash advances use credit card sales as collateral rather than unpaid bills.
9. Franchise Loans
If you still need capital, it will help you make your business goal faster and easier, rather than starting from scratch. Franchise Loans can give you the money to pay the down payment to open a franchise, so you can get up and run. Even if you are the borrower, some franchises may provide financial support for new franchises.
With so many options, it can be very difficult to choose a small business loan. But if you evaluate your business needs, you can reduce the options. Then research with a few lenders to see what interest rates, payments, loan rates and terms offer. This will help you get the best loan for your situation and get the money you need to run your business.
Don’t miss out: He stands for American Express for a while and supports small businesses affected by coronavirus
Editorial Note: The comments, analyzes, reviews or recommendations described in this article are for editorial staff only and are not reviewed, endorsed or otherwise approved by any third party.