In most cases the most limiting factor for small businesses is capital. It might be that you need capital to start your small business, or, for some unexpected reason, you may need funds to help hold you over. There are many reasons that a business loan is a good idea and the perfect solution for your business.
Types of Business Loans
Business funding can come in different forms of loans. The three forms of loans are fast business loans, equity business loans, and unsecured business loans. The type of loan you choose depends on your individual business and needs. Each situation is different.
Fast business loans are typically the lowest amount of money, with loans ranging from about $1,000 – $50,000. This is a secured loan. The loan term is anywhere between one to thirty six months, and it is perfect for either startup or established businesses. Owners can also choose this loan when they are needing solve a cash-flow issue.
Equity business loans are secured loans, typically with a minimum amount of $20,000 and a high end of $1,000,000. The loan term is typically one to thirty six months. The value of your assets depends on the limit. An equity business line works like a line of credit. This type of loan is great for both start-up businesses and established businesses.
Unsecured business loans are just as the name suggests, unsecured. This means there are not any security requirements. The loan term is typically one month to one year. In order to get approval for this type of loan, it is important to have good credit. If you have bad credit, it doesn’t necessarily mean you won’t be approved.
Another type of loan is a bad credit loan. Funding companies understand that everyone needs a second chance. For this reason, they are interested in helping businesses with bad credit. Other loans include low doc business loans, short term business loans, start-up business loans, franchise loans, caveat loans, and second mortgages.
Franchise loans work a little differently because when opening a franchise, a lot of the leg work has already been done, such as name, logo, protocols etc. The branding is already there. For this reason, franchises have a greater rate of success.
Start-up loans are designed specifically for new businesses. Banks view new businesses as high risk, and, for this reason, they do not always approve loans for them. This is where turning to a funding company for a start-up loan is a better option.
Advantages of Using a Funding Company
When it comes to needing funds for your business, you do not have time to waste. Time is money. You need funds as quickly as possible. The preapproval process for certain loans takes no more than five minutes. For other types of loans, it may take anywhere from three hours to a day to get approval. Once approved, loans can be received the same day. This is perfect when you are looking resolve a cash flow problem or if there is an important renovation or upgrading that needs to be done, and it will certainly help the profitability of your business.