Starting a business is not an easy job because it requires a lot of resources, hard work, and patience. Even if you can work hard and be patient to find the right resources and capital, it is still a difficult job. When you are unable to gather the required amount of money to start your business, you opt for a commercial loan. In this article, we will talk about the best commercial loans which you can choose that may prove to be a boost to your business.
- Traditional Term Loans: This is a kind of commercial loan which has existed in our society for a very long time now. To get a traditional loan from a private lender or a bank, you must mortgage something from your side which will equal to the amount of loan that you need. After taking the loan, you will be given a deadline by which you are required to pay the loan back with a certain amount of interest as levied by the lender. Failing to do so can lead to the loss of your mortgaged property or legal issues. The drawback of this kind of loan is that failing to pay the money back in the given amount of time will prove to be a big loss on your side.
- Short Term Loans: A short-term loan is like a traditional loan but with a deadline which is quite narrow. Short term loans range from 3 to 18 months and the interest on this kind of loan is higher than long-term loans. These loans are best when you need a quick and one-time expense. Short term loans are risky because you need to pay the lender back within the given amount of time that is always very short.
- SBA Loans: SBA loans are hard to get; it is given to individuals and companies who are more experienced in the market and have a better market turn-up. These loans can be of the long or short term usually coupled with low rate of interest. The down payments are also less compared to other ones but there are certain drawbacks as well. These loans consist of extensive paperwork and require long approval time which may slow down your business.
- Equipment Loans: To keep your business going, you require a lot of equipment. But so much of equipment will cost you a good amount of money as well. Therefore, equipment loans are the best commercial loans by using which you can carry on your business. In this kind of loan, the bank or alternative lenders give you the money to buy equipment for your business. You can pay the money back to the lenders on a monthly or quarterly basis coupled with low rate of interest. But the drawbacks are significant in which the equipment will be taken away as collateral, and you need to provide with big down payments.
- Business Line of Credit: A business line of credit is like a business loan, but you can access the money only via credit card given to you by the lender. These are short-term funding for your business which will pay for day to day expenses. You are required to pay the credit back with a rate of interests to the lender on a quarterly or yearly basis.
So, as you can see after reading this article that there are a plethora of commercial loans from where you can choose to take a loan for boosting your business and provide yourself with the helping hand.