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Which Loan is Right for Your Small Business

As all new and existing small business owners know, it can be quite a struggle trying to get financing for your small business. You may be doing well profit-wise, but sometimes it’s good to have a little help in areas you may be needing it in. This could be getting financing for new equipment, payroll for your employees, or maybe you want to get a brick-and-mortar front. Whatever you may need the funding for, we’re here to help you navigate the different types of small business loans out there and help you find the one that is just right for your needs.

Financing doesn’t have to be a struggle anymore. In fact, to get you started, you can check out places here to jumpstart your search:

However, if you want a more in-depth look at small business financing, check out the following to learn all there is to know about small business loans and what you need to get one that works for your financing needs.

Key Factors to Consider

We know you are excited to start the search for your small business loan, however, the first step you’ll need to do is consider key factors to address before settling on a loan. This helps you better understand the loan itself and gives you a good idea going into the specifications of the loan as to whether it meets your needs. Check out the following most important factors to consider:

  • The money – know before you go with a loan how much money you’ll be getting
  • Now versus later – understand if the terms of the financing will allow you to get access to the money now or if it will be given in either installment plans or a later time
  • Paperwork – most if not all loans require documentation, so be prepared to show this when submitting your loan application
  • Profiles – lenders require a profile, whether it be business or profile, so be sure to do your research to know what yours should look like to improve your approval chances
  • Cost – when reviewing the terms of a loan, be sure to understand how much the loan is going to cost you now or overtime
  • Repayment – know the terms of the repayment plan terms inside and out, you definitely don’t want to default on this

After you have considered all of these key factors thoroughly, the next step is understanding your credit and what chances it gives you for getting approved for a loan.

Understanding What Your Credit Means

As we all know, credit plays a significant part in whether we get financing in our personal and business lives. It should be no surprise that good credit is always highly encouraged to have, but not having the best credit doesn’t always mean you won’t get approved either. Check out below to learn more about what your credit status means for your financing options.

  • Bad credit – although certainly not a dealbreaker, it does typically mean you will have to work harder for financing. This means you may have to find a smaller lender that gives you less funding, but you can still get financing if you look hard enough.
  • Good credit – if you’re hanging somewhere in the mid-600s, you can definitely find some good lenders out there. And, the higher your credit gets, the better your rates will be overall when it comes time to finance.
  • Excellent credit – it should go without saying that excellent credit will get your foot in the door for financing, however, be sure that in addition to this that you have a couple of good years of financial history and have never defaulted on a loan.

Loans Available to You

After going over the key factors, understanding your credit score, and what it means to financers, you can now start looking into the best small business loan available to you. The following are the best types of small business loans to consider and information on why that can work for you and your needs:

  • Small business startup loans – as the name states, these types of loans are great for startup businesses needing some help to get off the ground. These loans typically service businesses that are less than three years old and can help in areas such as invoicing and business lines of credit.
  • Small business administration loans – this type of government-funded loan is great because it is a lot more reliable and gives you the financing you need to really focus on building your business.
  • Personal loans for business – don’t be fooled by the name, this type of loan is great for businesses because now only is it more manageable, it tends to have lower APRs, and you can qualifier for it a lot easier than other loans.

Take a Giant Step for Your Small Business

Now that you have the know-all when it comes to researching the right financing for you, there should be nothing stopping you from getting the loan you need for your small business. To recap, be sure to consider the following when considering financing for your small business:

  • Key factors – make sure to read and learn everything about a loan before applying so you are properly prepared
  • Credit – credit plays a big part, so know your score beforehand

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