Small business lending is a great way for entrepreneurs to access the capital they need to grow their businesses. From SBA-guaranteed loans to lines of credit, invoice factoring, and merchant cash advances, there are a variety of options available for small business owners. But which one is right for you? In this article, we'll take a look at the different types of small business loans and lines of credit available, as well as the pros and cons of each. SBA-guaranteed loans are one of the most popular options for small business owners.
These loans range from small to large and can be used for most business purposes, including long-term fixed assets and operating capital. Lendio is a great option for those looking for a one-stop-shop to apply for business loans, lines of credit, SBA loans, equipment financing, cash advances (MCA) for merchants, commercial mortgages, invoice factoring, and business acquisition loans. However, since Lendio is a marketplace and not a lender, it does not publish specific terms. Kabbage is another great option for small business owners.
They offer a variety of small business loans and lines of credit options, including secured and unsecured options. You can also apply for industry-specific loans for trucks, pawn shops, retail and more. Kabbage is proud of its simple online application process and fast funding for those who are approved. They also offer repayment terms of six and 12 months, depending on your needs.
With Kabbage, there are no hidden loan fees or prepayment penalties. You'll pay a monthly fee, but they're honest about it. Fundbox is another great option for those looking for lines of credit. With Fundbox, you have the opportunity to borrow only the amount of money you need.
Funds can be transferred from your line of credit to your business checking account as soon as the next business day. This provider gives you the option to save money by paying off your balances early and ahead of schedule without any prepayment fees. Fundbox allows you to see your credit line fees in advance and will automatically charge your bank account for the amount due, so you don't have to think about it. You have the option to repay your line of credit in 12 or 24 weeks. Kiva is another great option for those looking to access capital quickly.
Kiva loans are aimed at disadvantaged entrepreneurs, so investors who lend money through the platform have the opportunity to help people around the world. Kiva also lists simple requirements to qualify, such as living in the U. S., being at least 18 years old, and agreeing to use your loan for business purposes only. Fundera is a great option for those looking for Small Business Administration (SBA) loan options. Fundera offers a variety of business loans and lines of credit, including loan offers through the SBA.
Fundera is a marketplace for small businesses and not a direct lender, which means that the company won't finance your loan on its own. OnDeck is another great option for those looking for same-business day funding. OnDeck offers small business loans with same-business day funding which can be crucial for business owners who need quick access to cash to keep up with business expenses or pay for important equipment right away. OnDeck is transparent about loan details and eligibility requirements. Merchant cash advances (MCA) allow business owners to access a lump sum of cash by giving a portion of future sales receipts to the lender, which is usually a commercial services company. Equipment loans are another great option as they allow you to borrow money against equipment that you already own or plan on purchasing.
Because the equipment itself serves as collateral, equipment loans can be more affordable and easier to apply for than other types of small business loans. Invoice factoring can be useful for some business owners who have little cash but have a lot of unpaid invoices to use as collateral. The best loan for a business depends on several factors such as your creditworthiness, the amount you need to borrow, what the funds will be used for, and how quickly you need to access the income from the loan. It's important to find the one that best fits your needs. No matter which type of small business loan or line of credit you choose, it's important to do your research before applying so that you can make an informed decision about which one is right for you.
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