Need an Unsecured, No-Personal-Guarantee Loan for Your Business?
Do you want a business loan that doesn’t need you to put up your own money as collateral?
No, I don’t want a personal guarantee for my business financing.
Is Your Company:
Location: United States of America
In business for more than a few months
At least $100,000 in revenue was generated by your company.
Non-construction or non-real-estate-related business
The Different Types of Small Business Loans
Loans for businesses are loans for businesses.
However, this is not entirely the case. Because if you believe that all small business loans are evenly distributed, then you really should avoid applying for one at a bank at all costs.
Yes, you may have started your small business with your own money. Even if you may not want to be that small forever, isn’t it? To keep your business growing, you’ll eventually find yourself in need of additional funds from a bank or financial institution. Whatever the reason, you should know what financing solutions are available to aid with cash flow through slow periods and growth pains, acquire new equipment, hire more personnel or expand your office space.
Your small business can get a variety of different forms of loans. Before you apply, it’s a good idea to familiarise yourself with the differences between them.
A short-term loan is the most prevalent sort of financing available to businesses. The repayment period for this type of loan is usually only about a year. This is a great option if your company is short on cash and in desperate need of some short-term working capital.
However, exercise caution. When your merchandise or trade receivables are converted to cash, you’ll get it back all at once.
When starting a new firm, an alternate loan is frequently employed. Additionally, you might use the money to add new equipment or grow your business. As an additional source of working cash, you can consider taking out an intermediate-term loan. This loan has a one-to-three-year repayment period associated to it.
As an example, the terms of a three- to five-year long-term loan can be found here. These loans are typically used to fund large-scale capital expenditures or the purchase of fixed assets. When a company is just getting off the ground, it’s not uncommon to turn to long-term financing. Repayments are often made in monthly or quarterly instalments and are based on the life expectancy of the borrowed asset.
Finally, you can apply for a company credit card (LOC). So your company can borrow money for a set length of time. You will be allocated a credit limit for your company, and you can take out loans up to that limit whenever you need them. Using money via your line of credit does not necessitate a new application for credit each time.
However, you must adhere to this restriction and make sure that any outstanding debt is paid in full before taking out any more loans. If you don’t pay attention to the interest nor total sum, you could find yourself in a financial crisis before you realise it!
The lender will most likely conduct an annual evaluation of your company’s credit status if you have a LOC. You’ll likely be required to give updated financial accounts at this point in time, so be prepared. You shouldn’t have any issues getting it renewed as long as it is in order.
Before you set foot in a banker’s office, knowing the difference between loans or business credit will help you seal your success. An advantage is having the ability to demonstrate to the bank that you have done your research and know what you’ve been talking about.