There are so many variations of business loans out there in the market. Most of these loans rely on monthly payments for the payback like equipment financing and SBA Loans. There are other loans for which daily, weekly, and interest-only payment options are available. Some require the business owners to pay the loan back once it matures. When it comes to the lenders who are lending loans to small businesses, they ask for some origination fee, closing fee and documentation fee other than the interest that businesses have to pay. With these additional fees, the cost of these loans goes higher than interest rate. This business loan calculator can be used for calculating real costs of a loan considering all the fees and the rate of interest over the term of the loan.
Whether you're a startup or an already established business, there needs to be enough finance to run your operations smoothly. Whether you need it to buy new equipment or to take care of your business processes, finance is much-needed for your business to survive in a competitive market.
When in search of debt financing to fuel your business, you can turn to quite a few different sources including commercial lenders, banks and even your credit cards that are for personal use. Also, you don’t need to have an exact loan type in your mind before approaching the lender as they can guide you in deciding what financing option wills suit you best. Nevertheless, you must have a general idea about various loans available in the market as it will help you better understand where you’re headed if you choose the option your potential lender is suggesting. So, let’s take a look at some common options that might be available to you. Besides, you can use the business loan calculator to determine which loan option is better suited for your requirements.
These loans are often available from major commercial lenders. They're usually aimed at business expansion, refinancing, working capital or acquisition. Typically, such loans have a monthly repayment schedule, and the amount being lent is higher with low rates of interest as compared to short term loans. Generally, it is easy to obtain these loans if your business is well-established. However, even if you are just starting out but there is a strong plan for your business growth, you’ll be able acquire these loans easily.
Instead of monthly payments, these loans require you to pay them in full on the completion of agreed-upon loan term. Businesses often need these loans for fueling their short term requirements like building up inventory, raising cash for some accounts payable, or for completing small projects which can lead to quick returns. You can get anywhere around $100000 against these loans. They're particularly useful for the seasonal businesses and can be acquired from credit unions and banks.
Lines-of-credit are a good alternate to getting lump sum amount in loan as it allows small businesses to have incremental access to funds whenever the need arises. It works pretty much similar to credit cards. You can expect the fees and compound interest to be high. So, it is best to use these for temporary income shortfalls instead of business improvements and expansions. Banks and licensed lenders both offer these loans.