Here are the nine most common types of business loans available to entrepreneurs:
- Term loans.
- Business lines of credit.
- SBA loans.
- Equipment financing.
- Invoice financing.
- Commercial real estate loans.
- Personal loans for business use.
Then, how can I get a small business loan?
Steps to apply for a Small Business Loan
- If the financial lender has the online application facility, visit the website.
- Under the loans section, choose business loans or small business loans.
- Download the application form and fill in the required details.
- Submit the application form.
Beside above, what type of loan is a small business loan?
1. Term loans. Term loans are one of the most common types of small business loans and are a lump sum of cash that you repay over a fixed term. The monthly payments will typically be fixed and include interest on top of the principal balance.
What are the 4 types of loans?
- Personal Loans: Most banks offer personal loans to their customers and the money can be used for any expense like paying a bill or purchasing a new television. …
- Credit Card Loans: …
- Home Loans: …
- Car Loans: …
- Two-Wheeler Loans: …
- Small Business Loans: …
- Payday Loans: …
- Cash Advances:
Types of Business Loans 10 Best Options for You
- Term Loan. One of the most common types of business finance is a term loan. …
- Start-up Loan. A start-up loan is for new business ventures. …
- Working Capital Loan. …
- Loan against Property for SME. …
- Invoice Financing. …
- Equipment Financing. …
- Business Loan for Women. …
IDFC FIRST Bank provides unsecured business loans without any collateral. There is also no need for any co-signee or guarantor either. We provide you with business loans without security so that you can get easy access to credit for your business expansion needs.
Checklist of Documents Required for Business Loan
- Identity Proof: Driving License / PAN Card / Passport / Voters ID Card / Aadhaar Card.
- Address Proof: Ration Card /Telephone Bill / Electricity Bill / Passport / Trade license / Lease agreement / Sales Tax certificate.
- Income Proof: Bank Statement of Last 2 Years.
But can you pay yourself? Yes, if the funding is there. According to the SBA, operating expenses, besides equipment, raw materials and staff payroll, “include your salary as the owner and money to repay your loans.” Having said that, one major caveat is that you must be cautious in the amount you pay yourself.
The average interest rate on a conventional small business loan is around 3% to 7%. That said, interest rates will vary across lenders, with banks typically offering lower rates than alternative or online lenders.
In 2018, the average small business loan amount was $663,000. That’s for all business loans regardless of loan type. Depending on the amount you need for your business and what your lender offers can range from $13,000 to over $1.2 million.
How to Get a Business Loan with No Money Down
- Term loan.
- Business line of credit.
- Invoice financing.
- SBA microloan.
7(a) Loan Program Eligibility
- Operate for profit.
- Be small, as defined by SBA.
- Be engaged in, or propose to do business in, the United States or its possessions.
- Have reasonable invested equity.
- Use alternative financial resources, including personal assets, before seeking financial assistance.
- Be able to demonstrate a need for the loan proceeds.
What is a 7(a) loan? The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can also be used for: Short- and long-term working capital.