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What are Small Business Loans?

While seeking money from a bank might be your first choice, it is not always your best option. For many small businesses, banks do not provide interest rates and payment terms that are reasonable. For that reason, many entrepreneurs are now preferring to get the funds they need via small business loans from lenders who specialize in meeting their unique needs. These targeted loans include the following:

  • SBA 7 (a) loans let you borrow up to $5 million at fixed or variable interest rates to be used for equipment, real estate, expansion, acquisitions, working capital and more.
  • SBA Microloans let you borrow up to $50,000 for virtually any business expense.
  • Equipment loans are funded by the SBA, banks and other lenders and cover items such as computers, printers and machinery.
  • Working capital loans are offered by banks and alternative lenders. They give you the funds you need to operate while you are seeking other ways to raise revenue.

How Can Small Business Loans Help?

Whether you are looking to launch a new enterprise or take your existing one to the next level, a loan can give you the capital you need. With it, you can purchase additional technology, enhance your brand and even hire the staff you will need in order to grow. Take a look at just some of the many ways you can use a loan to catapult your business to a brighter future:

  • Purchase additional inventory. Imagine being able to plan ahead so that you are fully stocked during your peak season. When customers get what they want when they want it, they tend to return even long after the rush has ended.
  • Maintain and upgrade your equipment. Outdated or shoddy POS systems lead to customer and staff frustration and inefficient use of resources. When your devices are cutting-edge, so is your business.
  • Keep cash flowing smoothly. Even during down cycles, effective use of the funds from a loan can guarantee that your cash flows smoothly at all times.
  • Pay your employees no matter what. Regardless of sales figures, your staff should be a priority. Loan funds ensure that you are never short on your payroll.
  • Expand your product line. The funds from a loan give you the fuel you need to grow your company and expand your product selection to meet customer demand.
  • Hire more employees. The funding cushion from a loan lets you bring on the staff you need to meet your goals.
  • Fund a marketing campaign. Use the money to pay for consultants and marketers who can help you spread the word about your products.

How to Get a Small Business Loan

It is not as difficult as you might think to apply for a small business loan if you systematically follow these five steps:

  • Take time to think about why you need the loan and approximately how much money you will need.
  • Based on the types of loans described above and the needs you have targeted, decide which loan best meets your requirements.
  • Do your homework, looking at the various lenders and payment options. Don’t jump at the first good deal you see. Take your time, enlisting the help of an accountant or a lawyer if necessary.
  • Accumulate all of the business and personal information necessary to see if you qualify for the loan you are seeking.
  • Gather your documents in advance, and then apply for your loan. The more prepared you are, the better your chances of obtaining the funds you need.

Small business loans provide you with a uniquely customizable way to fund your business. With this type of tailored financial support, you truly can make it all the way to the finish line of the race to success. Isn’t it time you gave your company a much-needed shot in the arm?