With 2022 just around the corner, many entrepreneurs wonder what the best small business loan options are for their businesses. After a tremendous year facing COVID-19 and a surge of new technologies, it can be challenging to determine the best way to manage liquidity going into the new year. Fortunately, options are always available if you have good credit and an acceptable track record for your business. For small business loans you can access in days to jumpstart your introduction to the new year, BitX Funding has you covered. This article will cover popular loan options for businesses looking to excel in the upcoming year.
Short-Term Business Loan Options
Short-term loans are one of the best business loan options for established businesses needing quick cash. With this type of loan, the payment period is as short as 90 days up to 18 months, and the amount to withdraw is limited. These loans only offer a few thousand up to 500,000 in funds to draw.
Short-term loans are unsecured, meaning the borrowers don’t put up collateral for security. As such, lenders charge much higher interest rates to cover the associated risks. Unlike longer-term loans, short-term loans aren’t paid monthly or at a fixed APR. Instead, you make payments at weekly or daily intervals based on the cash flow factor rate. This makes short-term loans an excellent business loan option to cover payroll, unforeseen events, or the toll from COVID-19 in 2022.
Mid-Term Business Loan Options
Another exceptional business loan option for 2022 is midterm loans, as they 0ffer more money, less interest, and a more extended repayment period than short-term loans. Another bonus is paying off these loans in monthly installments at a fixed APR rather than weekly factor-rate payments. In short, midterm loans are a splendid cover-all option that offers a bit of flexibility with security in paying back loans at a reasonable rate.
Because these loans are secured, they are easier to qualify for. Further, when using lenders such as BitX Funding, businesses can get their money in days. However, midterm loans are best suited for companies operating for 2+ years, have 650+ credit scores, and have 250k+ in annual revenue. This makes M.T.L.s the best business loan option for established businesses looking to expand and scale in 2022.
SBA Business Loan Options
The small business administration (SBA) offers excellent business loan options for everything from startups to established neighborhood restaurants. You can qualify for an SBA loan if you’re a verified small business owner. In fact, SBA loans are considered the holy grail of loans due to their low risk and optimal interest rates.
However, the SBA is a federal organization and doesn’t lend any money. Instead, it finds trusted lenders willing to lend and covers the collateral for the borrower. If the borrower cannot pay off the loan, the SBA takes on that debt rather than the lender assuming the risk. This risk makes SBA one of the most challenging business loan options to qualify for as an entrepreneur. The underwriting process can take weeks, and a lot of initial and ongoing paperwork is standard.
The SBA even has Covid-19 funding relief options! That being said, SBA loans are a premium business loan option for established businesses with impeccable track records who wish to grow in the upcoming year. Further, with help from trusted lenders such as BitX Funding, you can get the resources you need to secure a loan and the knowledge to stay on top of every requirement.
Business Line of Credit
Business lines of credit (LOC) put a premium on versatility as a business loan option. They work similarly to credit cards, where business owners have access to a liquidity source they can draw from and pay back as they need it. Rather than pay a fixed price monthly, you can draw as much as you require from the LOC and pay off what you borrowed according to your business demands. In fact, drawing less than you require and paying ahead of time is one way a savvy business owner can take advantage of L.O.C.s during 2022.
The best part about LOCs is that you can use the money for whatever your business needs. However, the cost-to-benefit of LOCs depends on the risk to the lender. There are two primary business loan options to look out for when applying for LOCs. Secured LOCs require collateral, typically short-term assets, for lower interest rates and higher loans. Unsecured LOCs are available at higher interest rates because of lenders’ risk.
In fact, business credit cards are a type of unsecured line businesses owners can use to quickly and efficiently move their cash reserves around. Just be mindful of who your lender is. Established banks are often difficult to receive approval from and can take weeks of paperwork to see the loan. Online marketplaces such as BitX Funding can team you up with a trusted lender and guide you to your best LOC in a few days.
Invoice financing is the best business loan option for small businesses with delayed accounts receivable. Business owners take a loan against outstanding invoices to get the cash flow they need. Then, the lender loans them a percentage of the invoice and pays it in full when the customer pays it.
For example, if you’re a contractor who needs to pay for supplies upfront and complete a multi-month project before getting fully paid, you can stake the invoice as collateral for a loan. With this cash reserve, you can pay laborers, get supplies, and reinvest in future contracting services. Thus, if you’re a small business owner with delayed cash reserves, invoice financing is an excellent way to account for COVID-19 while staying strong in 2022.
BitX Funding is Your Online Lending Marketplace for 2023
Are you an established small business owner looking for ways to not only survive but thrive in 2023? The past year has been challenging for many businesses, but you don’t need to be one of them. As we head into the new year, all it takes to succeed is good business history and a savvy knowledge of business loan options. Whether you need short-term liquidity to pay employees, a large loan to scale your company, or a brand-new printer to brighten up the office, BitX Funding has you covered.
Our team of dedicated specialists can find a lender for you immediately and determine the best business loan option for you. COVID-19 has taken a toll on us all, but we know 2022 is the best time to return and make the world a better place.
For more information on working capital loans, contact BitX Funding by phone or email, or fill out the form below.