Apr 22, 2022
It's not a question of "if," but rather "when" you'll secure finance for your small business. Your business will require funding at some point, whether it's to get through a slow patch or expand.
That's why; even if you're not in the market for a loan, it's a good idea to keep tabs on what's out there so that you don't miss out. When it comes to small company loans, there are many possibilities accessible, but do you know the distinctions between the many types of loans?
Depending on what you're looking for and your educational and professional background is the only way to answer this question. If you're unable to get a bank loan, you may be able to get one from an online lender, but you'll have to pay a higher interest rate.
Better loan rates and more possibilities are available to those with good credit. Postpone asking for a loan until you've improved your credit by making on-time payments and reducing your credit card balances.
Having narrowed down the loan options you're interested in, you'll want to remove any you don't qualify for. For most traditional loans, two-year business history and a good credit score are required (SBA loans often want you to have FICO scores of 680 or higher).
You'll need to acquire all necessary paperwork once you've chosen a bank or alternative lender and the loan type you'd like to take out. A bank may require more extensive financial statements and tax returns, while an internet lender may only want to know how much money you make each year.
It's no surprise that many of the top banks made our "best of" list due to their wide range of financing alternatives. To walk into a bank, sit down and explain their needs in person—and have trust that they will obtain the correct credit product—is advantageous for business owners. There are so many different types of funding available that it can be difficult to know where to begin.
A term loan for a business is arguably the most basic in terms of loans. An agreed-upon sum and period for repayment are established for term loans, which have a fixed monthly payment throughout the loan term.
What banks refer to as medium-term and short-term loans are also included. A separate repayment period will be shown for each of the options.
For many small firms, a business line of credit has long been the favored funding method. It's better to have a credit line that you can use at any time rather than a lump sum that you have to pay back once you use it.
In addition, you only pay interest on the portion of your credit line that you utilize. An occasional cash flow shortfall can be alleviated by using a business line of credit. It's like having a credit card that you can use whenever you need to borrow money.
When it comes to traditional lenders, such as local and national banks, we at Nav have dealt with a number of them over the years.
Seeing Chase at the head of the group shouldn't surprise you. For businesses of all sizes, it offers a wide range of credit options, including working capital loans, equipment finance, and real estate loans.
Whether you're looking for a million dollars or more for a new storefront or manufacturing plant is your aim, this SBA lender has a variety of SBA-backed choices, including SBA 504 loans.
Live Oak Bank? Ever heard of it? You're not the only one who feels this way. No physical branches are required for this SBA-preferred lender, which operates entirely online. On the other hand, they're incredibly good at what they focus on. SBA 7(a) and 504 loans are both options. As an SBA preferred lender, Live Oak Bank can get you approved and on your way faster than most other lenders.
Since its founding in 1852, Wells Fargo has been a leading financial institution for consumers and businesses alike. When it comes to funding your business, this bank has a wide selection of choices. Among them are short and medium-term equipment loans, working capital loans; lines of credit; and business credit cards.
The SBA's small business loan program is another area of expertise for Wells Fargo. If you already have a Wells Fargo checking account, business checking account, or savings account, you may be able to take advantage of additional bonuses.