Sat. Jun 12th, 2021

Successfully managing or owning a small business can be incredibly challenging in any economy, but today’s market requires companies to be very competitive and constantly evolving to meet multiple challenges. Entrepreneurs often report that their most significant challenge involves cash flow and capital and many businesses that have never borrowed before are discovering the need for small business loans.

One of the most common types of small business loans is a fixed rate and fixed repayment installment loan that either uses equipment or inventory as collateral or is unsecured. The interest rate associated with such a loan is fixed and will not fluctuate, so there are no uncertainties that must be budgeted for. The repayment schedule is often flexible and can range from several months to several years. Loans that are secured by property can also fit into this category and may allow lower interest rates and longer repayment terms. Small business installment loans are typically most appropriate when a specific amount of money is sought.

Another very common small business loan that is often available is a revolving account or unsecured line that may or may not include a credit card. Companies that are looking to eliminate cash flow emergencies often find these types of small business loans to be very useful. Money can be advanced up to the total credit limit and the repayment term is often flexible and is based on a minimum payment requirement. The interest rate on these types of accounts is often variable, but there are some lines of credit that may offer a fixed rate or the ability to lock-in at a certain point.

Small businesses that accept credit cards can often borrow money based on their projected receipts or they can receive a loan that is secured by their accounts receivables. The characteristics of these¬†small business loans¬†vary greatly with each lender but are often designed to be very flexible. The most significant advantage of these options is that they are often available regardless of a company’s credit standing.

There are more options now than ever before for small companies needing funding and the most appropriate choice will obviously depend on various circumstances.


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