8 Things Entrepreneurs Should Look for When Getting a Business Loan
13 Jan 2023
1. The right loan type
As with personal finance, there are several different forms of business loans, so you need to choose the one that best suits the needs of your enterprise.
- Traditional loans: These are the business equivalent of a personal loan, which can be secured or unsecured. You'll borrow a set amount and have a set repayment schedule with a fixed interest rate.
- Line of credit: A line of credit provides you with a set funding amount but you don't need to receive and pay interest on the full amount. You can call down funds as you need them and you'll only pay interest on the amounts you borrow.
- Equipment financing: If you need funds to purchase equipment, this type of business lending is designed to suit your needs. The piece of equipment you purchase will act as collateral for the loan, so you can usually access more flexible terms.
- SBA loans: SBA or Small Business Administration loans are an option if you would struggle to qualify for a bank business loan. The lending criteria is more flexible, which could be a more agreeable choice for new enterprises.
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