What Are The Different Types Of Small Business Loans I Could Get?

Know What You Need To Ask For

Knowing the correct type of loan to ask for is essential in getting the bank to approve your desired loan. Banks have many different loans available and it is necessary for you to have a written business plan in place before approaching the bank of your choice.

Also, business owners have several types of funding choices, based on various factors about your business. Some of the programs available through the Business Credit Services are below.

Types Of Business Loans (Explained Basically)

• Secured Working Capital Loans

These loans are secured by collateral. The lender will take a security interest in your property. If you do not pay the loan back the lender has the right to seize your collateral. Most lenders will require collateral to secure a small business loan. Lenders will not lend you more than 100 percent of the value of your collateral and will usually only lend you 60 to 80 percent of its value.

• Unsecured Working Capital Loans

As the name implies, these are loans that are not secured by any collateral. Credit cards, while not technically loans, are the most common example of unsecured debt. The lender is loaning you money based on your reputation and credit worthiness. It is very. very rare to find a lender willing to give you an unsecured loan for a new business. Because you have no track record for them to work from.

• Start-up Loans

Loans for the new or start-up businesses

• Commercial Real Estate Loans

Commercial Real Estate loans with fixed or variable terms.

• Business Acquisitions

Loans to acquire an existing business.

• Accounts Receivable Factoring

Accounts receivable serve as collateral for short-term working capital loans that you ca obtain fast and cost effectively.

• Merchant Account Cash Advance

Up to a $50,000 advance against regular occurring monthly merchant credit receipts.

• Franchise Start-up Loans

Specialized financing reserved for the franchises of recognized, typically nationally known, franchises.

• SBA Business Loans

Loans to small businesses from private-sector lenders (banks, etc.), which are guaranteed by the SBA. The SBA has funds for direct lending or loans to small businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

• Lines Of Credit

A pre-arranged amount of credit based upon existing inventory, A/R and PO’s or up to $200,000 in business credit based upon credit worthiness with no collateral.

• Equipment Leasing

An easier way to find financing for your equipment needs and obtain tax benefits at the same time.

• Hard Money Equity Loans

Loans available that are typical hard to obtain from a local bank lender.

• Equipment Sale-Lease Back

If you have existing equipment, sell it and then lease back the equipment. Essentially you get cash for your equipment and then lease it back.

• Construction Financing

Loans for home or commercial construction.

• Business Only Loans

Loans can be obtained in the business name without the use of personal credit as long as the business can justify the loan amount and ability to pay it back.

• Residential Equity Lines

Lines of credit secured by the equity in your home.

There are also short-term and long-term loans with the above. So study before heading to the bank and it will help you with many of the questions you will have.