Small Business Loan Options

If a business wants to take out a loan there are some options that they have. They can take out different types of loans to get the funding that they need.

Personal Loan

The owner of the business can take out a personal loan for business purposes. This is an option, especially for startup companies. Banks will often not give a business a specific loan if they have not been in operation for several years. The funding will come quickly but the interest rates may be higher.

Business Credit Card

This card is a revolving line of credit. This will allow a business to get money as needed. They will have to keep making the monthly payments and there is a credit for it. This is often used for ongoing expenses but it can be used for emergencies. There may be a higher interest rate. The business may be able to earn rewards on their purchase and they do not need to put down collateral.

Microloan

This is a small loan and the cap for this loan is around $50,000. This is offered by mission-based lenders and is often granted to a startup or a newer business. They may help start a business in a disadvantaged community with the hope that it will help create jobs and stimulate the economy. This loan has a low-interest rate and there is financial advice that comes along with the loan. This amount is usually for a smaller loan and there are strict requirements for eligibility.

These loans can help a business get the money they need for supplies or to start up. There are some pros and cons to each type of loan so it is important a business do the proper research and read all of the eligibility requirements when applying for a specific loan.

Finance and loans