Different Products for Business Loans
One of the top challenges corporate face is finance. This finance may be required for a startup business or an existing business. A recession of losses that affect the company capital may be a reason why an established business requires additional finding. It may also be required to finance expansion activities such as marketing, research and development, equipment purchase, establishment of other branches or units.Business loans features as the most used source of finance to fund these activities.
Business loan products offered by commercial banks and non-banking financial institutions are varied. Over the years, the financial industry has mutated greatly and now offers more options which are cheaper and flexible. Online lenders have been on the increase making the process of also getting simple and fun.This article describes various types of business loans one may choose. To get the best; it is advisable that one analyzes each product according to each lender.
SBA loans are long term state guaranteed loans given by SBA lenders. It allows a business that fails to qualify for a loan from banks to get low-interest loans. The range of the loan is often between $5000 and $1 million. The repayment duration extends from five to twenty-five years. The interest rates are above six but less than 13 percent. Before thirty days are over; the loan can be processed.
There is the traditional term business loan which you get an upfront cash and pay within a stipulated duration. In most case, the loan goes above $25000 and less than $500,000 The loan can be repaid in as short as one year and as long is in five years.The processing period is maximum two days and interest rates fall between seven to thirty percent.
Equipment financing is a form of funding in which you receive money from a lender so as to buy a certain equipment. The loan amount can go up to full funding of the equipment value. The term of repayment is pegged on the expected service life of the said equipment. Rates do not go above 30% and below 8%.
Just like the credit card, there is the business line of credit. There is a maximum of amount of cash which you can withdraw at any time above what you have as reserves. It is only for the amount you use that you pay interest. The loan amount can be above $10,000 and less than $1 million.The service duration can extend from six months to five years with interest being above seven, and less than twenty-five percent You can get the money in your account even as little as in two days.
Securing the best product is much possible if you compare each product with others. There might be a difference between lenders regarding loan size, loan term, and interest rates.Another The great idea is to check for variations in lenders terms.
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