Starting a business is no easy task. You have to worry about offering a product or service that people will buy (and then make sure they actually know about it).
But, you also have to figure out where you're going to get your finances.
If you're like most of us, you probably don't have thousands of dollars lying around to spend on starting a company. Luckily, there are financing options you can take.
Not sure where to start? Don't worry, we've got you covered.
Let's take a look at five types of business loans that can help you get things rolling.
1. Business Credit Cards
Most small business owners don't have the time to wait for a bank to approve their loan. This is especially true if your credit score is anything less than 'Great.'
Fortunately for you, there are credit cards specifically designed to resolve this issue.
Not only will business credit cards allow you to secure everything you need for your company, but you'll also be able to immediately separate your business purchases from your personal ones.
Furthermore, you can start building business credit right away.
2. Term Loans
This type of loan is ideal for someone who needs money as fast as possible. In fact, you can secure an expansion term loan in as little as one week.
These loans are exactly what you'd expect from a bank, but you can secure them through an independent lender. If you have decent credit, you'll be able to enjoy flexible repayment plan options as well as lower interest rates.
Those with poor credit aren't prohibited from securing term loans. But, they may need to offer collateral.
As the name suggests, these loans aren't going to be for a large sum of money. But, they can be useful for down payments, equipment, and other general expenses.
Microlenders are non-profit organizations that seek to aid small businesses through microloans. Like with most other industries, there is a variety to choose from when looking for the option that's right for you.
4. Merchant Advances
For companies that currently make (or plan to) a large number of sales through credit cards, merchant advances are the perfect option for financing.
These loans are easy to acquire approval for due to the fact that your repayment plan involves giving a percentage of your business's credit card sales to the lender.
This rate is also variable, meaning you'll pay less when business is slow but more when things pick up. Thus, you won't have to worry about owing a large sum of money if you haven't been hitting your sales goals lately.
5. Financing Equipment
Equipment financing is very straightforward. The loan you receive is only to be spent on equipment you need for your business, and the equipment you purchase is your collateral.
Because of this, you're more likely to get approved for equipment loans if you have shaky credit history since the lender reserves the right to confiscate your equipment if you miss payments.
The Different Types of Business Loans Can Be Intimidating
But they don't have to be.
With the above information about the types of business loans you can choose from, you'll be sure to choose the loan that's right for your company.
Want to learn more information that can help you grow your business? Check out the rest of our blog!