When you are planning to open a new business, chances are you will need to look into getting a loan to help fund your start up. Even after you open your doors, you may find a need for a loan in order to keep your business running and growing. Luckily, there are several loan options that are perfect for businesses and a few may surprise you. Take a look at these funding options and see which the best is for you and your personal situation.
1. SBA Loan
A loan from the Small Business Association (SBA) may be exactly what you need to jump-start your business. These loans are designed to help smaller companies and, therefore are typically granted in smaller increments. However, if you do not need a lot of cash, an SBA loan can be perfect for you. As a government-backed loan, you may have to jump through a few hoops to be approved and receive your money but the interest rates are low overall and you can usually get a long loan term, allowing you to pay less each month.
2. Personal Loan
Rather than rely on the credit of your business (which can be especially hard if you are trying to start a new business), you can take out a personal loan instead. Personal loans are a fantastic way to get funding as you can get cash quite quickly and can spend it on anything you’d like. Personal loans tend to have no set requirements as far as spending goes which is great for a business who may need to spend on all sorts of things, from equipment to salaries. You can visit OzMoney for a business loan and start the process to get the cash you need right now!
3. Business Line of Credit
If you have already been operating your business and have established a credit history, you may qualify for a business line of credit. This kind of loan can be compared to using a credit card but is easier to get, especially if the business has a lower credit rating. Your approval will be based on your business size, income, and business credit. This type of loan is usually very quick to receive, getting you approved within a day so you can have the cash you need immediately. Expect fast pay off times (which means higher monthly payments) and average interest rates.
4. Merchant Loan or Cash Advance
One way for an existing business to get cash quickly is to use a merchant cash advance. This gives you a lump sum amount of money in exchange for a percentage of your daily credit card sales. This means you will essentially be paying the loan off every day, paying more or less depending on your daily sales. This can be a great way to get the money you need quickly and pay it off bit by bit. There are typically no specific loan terms for this kind of credit but the lender will just keep taking a percentage of your sales until the loan is paid. There is also no set interest but usually a “factor rate” where you multiply the loan amount by a rate (typically around 1.5). This can be a creative way to get the loan you need!
5. Personal Loan
Rather than rely on the credit of your business (which can be especially hard if you are trying to start a new business), you can take out a personal loan instead. Personal loans are a fantastic way to get funding as you can get cash quite quickly and can spend it on anything you’d like. Personal loans tend to have no set requirements as far as spending goes which is great for a business who may need to spend on all sorts of things, from equipment to salaries.
