Types of Business Loans
Small business owners need funding for starting their businesses as well as for meeting the costs of business expansion / acquisition and capital investment. Besides, you need capital to run your business in a streamlined manner. These loans are provided to an entrepreneur on the basis of certain set rules and regulations. One can avail these loans from banks, personal investors or through various other lending sources depending on his / her eligibility and feasibility.
The varied category of business loans is enlisted below:
Secured Business Loans
A secured business loan is a loan with collateral. It is granted in exchange for a repayment guarantee within stipulated time-frame. While taking a secured business loan, a borrower has to submit a collateral security against the loan in the form of land mortgage, stocks, bonds or other assets. These loans are useful for those who want to obtain hefty amount of money. The best thing about a secured loan is that it allows you to get a heavy financing at lower interest rates, and has longer repayment terms unlike unsecured loans.
Unsecured Business Loans
To obtain an unsecured loan, a borrower must have a good credit history. You cannot get an unsecured loan through collateral. The interest rates of unsecured business loans are higher and the interest on an unsecured loan is not tax deductible. While funding unsecured business loans, lenders mainly consider the financial history of a firm as well as the repayment ability of the borrower.
An entrepreneur can avail trade loan as a startup capital or working capital depending on his / her requirement. In this type of loan, the loan amount varies depending on the age of the customer as well as on the repayment ability and the tenure of the loan repayment.
A professional loan is borrowed by professionals of diverse fields like medicine, law, CA and interior designing etc. Your loan amount is based on your age, financial history and repayment ability. The maximum tenure of this loan is up to 5 years.
Short Term Business Loans
Short term business loan is suitable for entrepreneurs who face financial crisis and require immediate capital. As the name suggests, this loan is provided for a short period of time, and the borrower needs to repay it within a period of one year.
Intermediate Business Loans
Aspiring entrepreneurs who want to start their businesses can obtain this form of loan. This loan is ideal for newbies in purchasing business equipment as well as in building inventory for their businesses. You can also utilize this loan as your working capital. The repayment period of this loan is from 1 to 3 years.
Long Term Business Loans
Loan term business loans are normally borrowed by established business owners. This type of loan helps an entrepreneur in increasing his / her fixed assets for business expansion or acquisition of new business. Startup businesses can also avail this loan for buying commercial properties as well as for construction purposes. Moreover, these loans can also serve as long term working capital for your business.
Biz2Credit can help you secure various types of business loans according to your business needs. Backed by a wide network of lenders, we can provide you various lending matches to meet your specific funding requirement. Our case managers work in tandem with your business strategies to provide you the best lending options available.