Loans for small business encompass all financing options available for business owners. Although, technically your business doesn’t have to be “small” in order to get one. Each type of loan is unique in addressing different specific needs. One type of financing helps entrepreneurs get new equipment. Another helps make unexpected purchases. Others help business owners with fair to bad credit scores, etc.
How Do They Work?
Business loans act in very similar ways to personal loans. However, they can only be used for your business. If you’ve ever taken out a mortgage loan, student loan, or any other type of loan for personal use, then you already have a good idea as to how they work. A business financier lends money to a business owner, who can then use the capital to fund their specific needs. The loan is then gradually paid off over time until all lended funds are depleted. Different types of financing are paid off in different ways. Some come with fixed payment terms, in which a certain amount of capital and interest must be paid in regular predetermined intervals. Others come with payment terms that offer flexible deadlines that are affected by the nature of each loan itself, and not by predetermined payment periods. Similarly, interest rates also differ depending on the type of financing you obtain. We will explore these concepts in further detail below.
What’s Considered a Small Business Loan?
Any loan specialized exclusively for small business use is considered a small business loan.
Ironically, you don’t need to own a small business in order to obtain most of them. This excludes loan types such as SBA loans, which can only be obtained by small business owners.
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What Are The Benefits?
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All Industries
Get funding to grow, no matter what industry your business is in.
How Can You Use Your Small Business Loan?
There are no restrictions—use your capital to pursue any opportunity or overcome any challenge!
Business Growth
Buy new equipment or inventory, hire new staff, or prepare for seasonal changes.
Business Expenses
Get extra working capital to manage payroll, bridge gaps in cash flow, or pay bills.
Business Opportunities
Expand or open a second location, take on more clients, or capitalize on bulk order discounts.
Why Use Alternative Financing?
Small business owners need a dependable source of funding in order to take on any opportunity, and solve any business challenge.
From taking on more customers, to hiring more staff, to purchasing materials, fixing broken equipment, managing payroll, to getting working capital in times of interrupted cash flow, at some point every small business needs help optimizing their operations.
Using your personal finances and business profits is one choice. However, most small business owners wind up switching to borrowing capital for several reasons, including:
Not paying full expenses up front
Saving cash with a lower cost of capital
Protecting business and personal assets
Saving valuable time and resources
Bridging gaps in cash flow
How Do You Qualify?
All you need to qualify through National Business Capital & Services is
6+ Months in Business
$100K in Annual Gross Sales
No Minimum FICO Required
However, qualifications will vary depending on the type of lender providing them, and the type of business loan you need.
For example, in order to qualify for an SBA loan, you will need:
6+ years in business
$10K in Monthly Gross Sales
And 685+ FICO
How Much Can You Borrow?
You can get as many loans as you’d like at a time. The decision of how much you should borrow is a different story.
Most small business financiers advise that you only take out one or two loans at a time.
Some loan types compliment each other perfectly, such as fast business loans and SBA loans, and can benefit small business owners in ways not possible by themselves.
It’s crucial that you speak to a Business Financing Advisor before applying to more than one at a time, so as not to be overwhelmed and over complicate potentially simple funding needs.