As a business who are looking for a loan, it’s important to understand what’s available for you. Once you have an understanding of the type of loans, you’ll then be able to figure out which one will work best for your company in the longer run.
Short term loans
Short term loans mean that you will have to repay the loan within a shorter period. Usually, you will need to make a weekly or monthly repayments to be able to pay the loan in the agreed time. With this type of loan, you can only get a small amount to borrow due to the short period of the repayment.
The benefit of acquiring short term loans is that your funds will be immediately available in your bank and you’re more likely to be approved even with a bad credit check. However, there is a drawback where you will have to pay a higher interest.
Small business loans
Small business loans are available to businesses who are looking to start up their company. They are normally long term loans with a low-interest rate. This type of loan could be partially covered by the government if the borrower ended up not being able to make the repayments.
When buying equipment for your business, you can borrow the equipment value. Depending on the equipment you may have to pay the amount in a short or extended period. The benefits of this are that you’re most likely to get approved quickly and there is less paperwork to be done.
Invoice financing is when the lender agrees to pay for any of your outstanding invoices with a charge fee. Different companies will have different approval requirements so make sure you check them and see if you are eligible.