A small business loan can help you expand your business, improve cash flow, or help to cover unexpected expenses. If you need to get a small business loan, get started here. You can compare quotes from lenders who are specially qualified to help businesses just like yours.
Small business loans come in a variety of types. Besides the alternative methods of business funding listed here, there are many different types of small business loans available depending on what kind of business you operate and what you plan to use the money for.
Secured Business Loans or Unsecured Business Loans
Small business loans can either be secured or unsecured. Secured business loans are loans that are made based on an asset that you agree to put up as “collateral”. If you fail to meet your obligations under the loan agreement, the bank has the right to liquidate your collateral in order to minimize its losses. Unsecured business loans are made based solely on your promise to repay it. They also tend to carry a higher cost do to the level of risk involved.
Depending on your preferences and your financial situation, one may make more sense to you than the other.
Fixed Terms, Fixed Payments
Traditional small business loans lack the flexibility that you can get with other types of financing. They always have a fixed term and fixed payments, but often come with the best rates you can get. The term can range anywhere between 6 months and several years. The payment schedule can range from fixed daily payments, fixed weekly payments to fixed monthly payments. You may be able to structure a custom payment schedule depending on the bank you’re working with. Some of them may accomodate semi-monthly or bi-weekly payments, but that is not the norm.