Running a business is hard work. And most times, you face drawbacks and losses.
Such tough times call for immediate financing. However, from asset-based lending to business term loans, various types of loans available for businesses. So, how do you decide what type of loan would be the best for your business and financial conditions?
In this article, we talk about all the different loan types and which is the right option for your business.
1- Business Term Loans
A business term loan has a fixed interest rate. No matter how many installments you’re paying over the years, every payment would have the same interest rate. If you’re a small business owner looking for flexible financing, this is the loan for you.
The small and fixed interest rates would help you focus on your business and growth without worrying about increased payments. It has few restrictions and requires you to spend the loan amount on buying new equipment or making new investments.
However, if your business is at a good stage and you need a quick loan for a one-time purchase, this loan might not be for you.
2- Small Business Administration Loans
A small business administration loan or SBA is the kind of loan private lenders provide to businesses in need. The government backs these loans. There are three different kinds of SBA loan programs.
- 7(a) Loan Program
- Microloan Program
- CDC/504 Loan Program
All of these loans need a say in your company or a company share as collateral. This loan requires a personal guarantee from the borrower to. This loan is suitable for businesses with high credit and growth.
This loan option is available for businesses that are willing to expand in the US only.
3- Asset-Based Lending
In simple words, an asset-based loan is given in return for an asset. An organization with a valuable asset can use it as collateral and apply for an asset-based loan.
An asset-based loan is great for small businesses with low credit scores and those that don’t qualify for traditional loans. However, businesses that don’t have valuable assets cannot apply for asset-based lending.
Looking for an asset-based loan for your business?
There are multiple organizations that provide asset-based lending in Chicago. However, you should choose Global Capital Partners Fund LLC for asset-based lending.
Reach out to them today if asset-based lending is what you’re looking for!