Small business owners need business loans to grow. It’s part of the journey. But before you get a loan, you need to determine how much money you need, what you’ll use it for, and how you plan to pay it back. It’s also good to look into every type of business loan option to find what suits you the most. If you’re looking for a small business loan, this article is for you.
Types of Lenders
There are different types of lenders, such as the ones discussed below.
Small Business Administration Loans
The Small Business Administration has several loan programs for different types of businesses. While these loans don’t exactly come from the government, they are backed by it. As long as you meet the SBA set guidelines, you can get a loan to boost your business. While these loans tend to have lower interest rates, they’re also not easy to qualify for.
Conventional Bank Loans
This is another business loan option to consider. These types of loans can come from banks or credit unions. One of their benefits is that they tend to have favorable interest rates. However, the approval rate is so small that very few businesses qualify.
Alternative lenders tend to be very attractive to new entrepreneurs because this business loan option is easy to get. You make an online application and get approval in a matter of days. Even with a not-so-perfect financial history, getting a loan from an alternative lender is relatively easy.
What Lenders Consider Before Giving You a Loan
Most lenders will check how long you have been in business before giving you a loan. The longer you have been running, the more confidence they’ll have in you. They might also check your business credit score. A bad credit score doesn’t necessarily mean you won’t get a loan, although it can dictate the interest rates you’ll get. Lastly and most importantly, they’ll check if you have sufficient collateral to back up your loan application.
Are you wondering what business loan option is right for you? Talk to us. Private Client Capital Partners has financial experts who will help you select an option that’s right for your business.