Business Loans

Small Business Loans

In the U.S. small businesses are essential to the fabric of our economy. In a single year small businesses can provide over a million jobs. In fact, they helped the country’s economy grow 3.4% in 2017. Yet, the process of creating, owning, and maintaining a small business can be challenging. The high costs of equipment, employee salaries, inventory, rent, and other expenses can be difficult to meet for a new business.

Since a small business is independent of other corporations and firms, many businesses owners require capital to succeed and grow. This is where small business loans are beneficial. Small business loans provide the opportunity for business owners to get the cash flow they need to run their businesses more efficiently and successfully with less risk to their personal finances.

With over 30.2 million small businesses in the country according to data by the Small Business Administration (SBA), the average small business begins with $50,000 in capital. As businesses grow or experience challenges in the markets, they require lending for support. Large corporations have multiple ways to finance their expenses, but for small businesses, a small business loan can help owners safeguard their personal assets.

There are several types of small business loans available. Some small business loans are for specific types of businesses such as startups, retail shops, or business owners with bad credit. Other loans are industry-specific, which means they’re related to the type of business you own. For more information about small business loans, check out the financing options below.

SBA Loans: Small Business Administration Financing

Small businesses with less than 20 employees experienced the most growth in 2015, creating 1.1 million jobs. This kind of economic development is why the Small Business Administration was formed. As an organization dedicated to helping small business owners succeed through advice and economic guidance, business owners seeking low-interest loan rates who are not in a hurry for funds, can apply for an SBA loan.

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Business Line of Credit Loan

A business line of credit is a great option for business owners who may need funds quickly, but do not need a fixed amount of money lent to them over time. With a business line of credit you only use what you need and pay interest on that sum.

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Startup Business Loans

A business line of credit is a great option for business owners who may need funds quickly, but do not need a fixed amount of money lent to them over time. With a business line of credit you only use what you need and pay interest on that sum.

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Short Term Financing & Business Loans

If your business is in need of quick financing that can be repaid in a short period of time, the answer to your emergency cash flow problem may be a short-term loan. Though this type of small business financing can have higher interest rates, these loans have terms of only six months to two years.

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Merchant Cash Advance Financing

Small businesses with revenue from credit and debit cards such as retail stores and restaurants have the option of using a merchant cash advance. An MCA provider essentially purchases your future profits, which are then automatically deducted with a fixed payment from your future profits.

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Invoice Factoring & Financing for Small Businesses

For small businesses with many invoices that are slow to be repaid, such as trucking company that seeks repayment from shippers and brokers, invoice factoring is a financing option that provides a portion of the funds to you and then collects the debt on your behalf.

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Accounts Receivable Financing

Similar to invoice factoring, accounts receivable financing is a line of credit for small business owners who are looking to cover business expenses while waiting for payment from clients and vendors.

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Unsecured Business Loans & Financing

Traditional small business loans require collateral or a down payment to show a business owner’s ability to repay the loan. With an unsecured loan, collateral is not required, so there is no value against the loan to reduce the risk of investment for the lender. That’s why these loans have higher interest rates, but it’s also why they can be a desirable option for business owners with fewer assets.

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Business Acquisition Loans

Purchasing an existing business can be an expensive endeavor, though for some small business owners the risk of owning a working business is less than creating a new one from scratch. However, not many people can purchase a business outright. There are several ways to finance a business acquisition with the help of a lender.

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Inventory Financing Loans

For some businesses, sales can ebb and flow, but a consistent need for inventory is required. An inventory finance loan allows a small business owner to purchase the products or materials needed before the products are sold. This form of financing allows business to keep running even when cash reserves are low.

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Micro Business Loans

Some small businesses do not require large sums of money, but require lower interest rates than a business credit card. A micro loan is an option for a business owner who seeks less than $50,000. Micro loans are typically only $10,000 and can financed through nonprofit micro-lenders and crowd-funding sites.

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