You don’t need a finance degree to know that the present economy is booming, but you need to access working capital to pay for new employees, office space, equipment, and marketing, or else you can’t compete. Not every business owner has the savings to get up and keep things going. That is where business loans come in handy. In fact, for most business owners, loans are the only option they have for obtaining cash to execute their companies further.
Small Business Loans
Small business owners no longer have to rely on banks. With online and private lenders’ presence, getting different types of small business loans that suit your business and needs is easier. You can check more about various small business loan options available at BitX Funding.
Let’s talk about the types of small business loans available in 2019.
Short-Term Business Loans
Short term business loans are designed to fulfill urgent cash flow problems like dealing with unexpected needs for extra cash flow or paying off expensive debt. Short-term business loans are also ideal for taking advantage of business opportunities. They are usually a 3 to 18 months term. They typically have a higher interest rate because they get you maximum cash as fast as possible and have less paperwork than alternative options.
Follow the link to see if you can qualify for a quick short-term business loan.
Mid-Term Loans
If your business has undergone the startup phase, a medium-term loan could be an ideal option for business owners. As compared to short-term loans, mid-term loans come with lower APR and more flexible repayment terms. These loans are an excellent way to grow capital for your business. Mid Term loans are best if you have a long-duration business plan and try to invest in something you are not sure about. But remember, the term loan that you receive will mostly depend on your credit rating, cash flow, and many other factors.
Follow the link to see if you can qualify for a Mid Term Business Loan
Business Line of Credit
A business line of credit is a type of loan in which you get access to capital to draw from whenever your business needs it. Unlike other loans, in the business line of credit, you have the flexibility to borrow up to a set amount. You will repay the amount for what you withdraw (including interest). They are also one of the finest options for almost every business, especially when there is uncertainty that comes on the heels of an unexpected cost.
Merchant Cash Advances
It is a type of loan in which you get access to capital in exchange for a percentage of your daily credit or debit card sales with an additional fee. They are best because they can be a quick and easy way to get business cash without any collateral, as you would do in other business loans. They are the best option for businesses like restaurants or retail shops. Furthermore, they can still be an option with an average credit score.
Follow the link to see if you can qualify for Merchant Cash Advances.
Startup Business Loans
As the name suggests, startup business loans are designed to help people looking to start things off. The issue is that most startups require some amount of seed money, which is hard to get because of any previous business history, credit score, or revenue. People looking for startup business loans can face real difficulties securing a loan.
But there are options available for getting a startup business loan. Here’s a comprehensive guide about different options for startup business loans available.
Invoice Financing
Invoice financing allows small business owners to take a loan against the invoices from a funding body for a percentage of their worth. It is designed to help businesses whose customers take longer to pay up or other issues related to the business line of credit. You can easily obtain a loan against invoices because it allows any business with a B2B model to qualify. They also have less paperwork and are easy to approve.
Follow the link to see if you can qualify for Invoice Financing.
Equipment Financing
Every business owner knows how important it is to quickly and economically obtain, upgrade, or replace the equipment needed to perform their daily tasks. Equipment financing is there to keep your business functioning at optimal performance. It is simply a loan designed to help businesses purchase or upgrade business-related equipment such as systems, places, traveling (vehicle), or else. You typically require collateral against your debt.
Follow the link to see if you can qualify for Equipment Financing.
SBA Loans
Small Business Administration loans consist of multiple programs that guarantee up to 85% of the loan amount. A government agency provides SBA loans through SBA-approved lenders, which are mostly banks. It includes three main plans named as:
- The 7(a) Loan Program
- The Microloan Program
- The CDC/504 Loan Program
Here’s a comprehensive guide about SBA loan programs available.
Business Loan for Women Entrepreneurs
Everyone can find a loan for their small business, but women suffer a stubborn time or hurdles getting the capital. Lenders like BitX Funding come up with a solution to help women business owners in their business. These loans consist of multiple programs or options so that any women entrepreneur chooses the best one that meets their business requirements.
Here’s a comprehensive guide about Business Loans for Women.
Business Loan for Veterans
A veteran business loan is another type of debt financing that is designed to help veterans develop their businesses successfully. They can be available for both men and women and also available for those looking to start their business.
Here’s a comprehensive guide about Business loans for Veterans.
Home Renovation Loan
Home improvement loans are provided to help people with simple home upgrades, complete renovations, and new construction, hopefully increasing their value. Everyone does not always have a substantial cash flow to establish a new kitchen or bathroom or for a loft conversion. Home renovation loans are essential because, with time, living in outdated homes can be a pain to live in and challenging to sell.
Eligibility Criteria of Loans
Eligibility criteria for qualifying for a loan will always depend on the lender’s rules and regulations. For example, getting a loan from banks is harder compared to private and online lenders. The below stats are general and offered by most online or private lenders.
Eligibility Criteria of Short-Term Business Loan
To Qualify, You Need
- 1+ Business History
- At least 500+ Credit Score
- Minimum 100K Annual Revenue
Policies
- The annual interest rate will usually start at 8%
- Terms can be 3 to 36 months long
- You can obtain cash from $5,000 to $500,000
You can get an estimated loan of 10% of your annual revenue in short-term business loans.
Eligibility Criteria of Mid-Term Business Loans
To Qualify, You Need
- Minimum 2+ Years in Business
- At least 650+ Credit Score
- At least 250k Annual Revenue
Policies
- The annual interest rate will usually start from 4.99%
- Terms can be 12 to 60 months long
- You can obtain cash from $25,000 to $500,000
Eligibility Criteria of Business Line of Credit
To Qualify, You Need
- 1+ Business History
- At least 600+ Credit Score
- Minimum 100K Annual Revenue
Policies
- The annual interest rate will be between 13.99% to 39.9%
- Usually, have fixed monthly payments
- You can obtain cash from $5,000 to $100,000
Eligibility Criteria of Merchant Cash Advances
To Qualify, You Need
- Minimum 2+ Business Story
- Prime Credit Score
- Minimum $100K Annual Revenue
Policies
- The annual interest rate will usually start from 6.98%
- Terms can be 6 to 18 months long
- You can obtain cash from $5,000 to $500,000
Eligibility Criteria of Startup Business Loans
To Qualify, You Need
- 0 > In Business
- 700+ Credit Score At least
- < 30% Utilization Credit Cards
Policies
- The annual interest rate will be between 0 to 15%
- Minimum monthly or full payback
- You can obtain cash from $25,000 to $150,000
Eligibility Criteria of Invoice Financing
To Qualify, You Need
- 1+ Business History
- At least 600+ Credit Score
- Minimum 130K Annual Revenue
Policies
- The annual interest rate will be between 8 to 30.0%
- You can obtain up to 100% of the invoice value
Eligibility Criteria of Equipment Financing
To Qualify, You Need
- Less Than 1 Year In Business
- At least 650+ Credit Score
- 100K Annual Revenue is preferable
Policies
- The annual interest rate will be between 8 to 30.0%
- You can obtain up to 100% of the equipment value
Eligibility Criteria of SBA Loans
To Qualify, You Need
- 2+ Years of Business History
- At least 650+ Credit Score
- 300K Annual Revenue
Policies
- The annual interest rate will usually start from 5.75%
- Terms can be 10 to 25 years Term
- You can obtain cash from $30,000 to $500,000
Eligibility Criteria of Business Loan for Women
To Qualify, You Need
- 1+ Business History
- At least 600+ Credit Score
- Minimum 100K Annual Revenue
Policies
- The annual interest rate will usually be between 13.99% to 39.9%
- Fixed Weekly Payments
- You can obtain cash from $5,000 to $100,000
Eligibility Criteria of Business Loan for Veterans
To Qualify, You Need
- 1+ Business History
- At least 600+ Credit Score
- Minimum 100K Annual Revenue
Policies
- The annual interest rate will usually be between 13.99% to 39.9%
- Fixed Weekly Payments
- You can obtain cash from $5,000 to $100,000
Eligibility Criteria of Home Renovation Loans
To Qualify, You Need
- 1+ Business History
- At least 600+ Credit Score
- Minimum 100K Annual Revenue
Policies
- The annual interest rate will usually be between 13.99% to 39.9%
- Fixed Weekly Payments
- You can obtain cash from $5,000 to $100,000
As mentioned above, these are the general criteria for qualifying for the loan, so don’t consider them as the only criteria available. For example, you will experience higher AIR rates in banks.
Which Loan Is Best For You?
Since there are plenty of loan options available, it can be overwhelming for a business owner to select one of them. Ideally, only a business owner can determine which loan to choose for his or her business. The below steps will help you analyze the best loan option for your business.
How to Choose the Right Loan Option for Your Business?
Step 1: Analyze Why You Need a Loan
First of all, you need to think broadly about why you are taking the loan. Do you need a loan for specific business requirements or to fulfill several business aspects? Calculate the amount of cash you need and examine your business history with credit score and annual revenue.
Lenders will ask you questions about your business, and you must reply with your proper plans and needs. Chances are, the lender guides you about the best option you can choose. So having a clear vision of your business needs and strategy will help both you and the lender.
At BitX Funding, we guide business owners on the best loan option so that they can easily manage their business matters and get the most benefit from our loan services.
Step 2: Study Different Loan Providers and Their Policy
Well, you cannot study all the loan providers, but examining the top 3 or 5 is the best thing you can do before applying for any business loan. Before signing any contract, you must know what you are getting into and make sure there aren’t any hidden charges that include, as you will face while dealing with scammers.
Professional lenders always have reviews to prove their work and commitments. Since we are one of the leading lending companies based in the USA that offer every business loan on ideal terms and conditions, check out our reviews.
Step 3: Keep Your Documents with You
If you are dealing with banks or private lenders, you must go through a lot of paperwork and references. Having documents not gathered or ready may result in further delay. So it is always an excellent option to gather all your required documents before applying for business loans. Well, you may not need all the below documents while working with online lenders, but have kept them with you is a safe bet.
- Credit Score
- Business Tax Returns
- Equipment Quote (while getting EQ financing)
- Voided Business Check
- Bank Statements
- Balance Sheet
- Driver’s License
- Profit & Loss Statements
- Personal Tax Returns
- Business History
Whatever loan program you select, the above documents will be enough, and you will not have to provide more paperwork, whether working with banks, online or private lenders.
Step 4: Match Your Business Requirements with Available Loan Options
Once you have examined your business needs and the best option to take a loan from, it’s time to analyze which loan program will suit the best for you. It is common that the business owner goes for the one that offers more time to repay the loan or the lowest AIR. But make sure whatever loan you choose meets and satisfies your business needs.
For example, if you need to upgrade your office equipment financing, then why not go for equipment financing loans? And if you need urgent cash to maintain your business, then short-term loans are the ideal option. You cannot apply for SBA loans if you need cash in a day or two because SBA loans can take longer. So choosing the right loan is essential for your business rather than looking for the most lenient terms and conditions. Also, make sure that you can repay the loan.
Pros and Cons of Having a Loan
Pros of Having a Loan
Let’s be truthful; no one wants to close their business. Loans are the only life-saving option available for business owners looking to help their business with extra and urgent cash. Different loan options are available that are designed to help businesses with specific needs.
Loans help your business to expand, reach new heights, suffer hard times, upgrade equipment, and all the other aspects that require cash. So pros are worthy and can be ignored in any case because you can end up with empty pockets if the situation gets worst. If you use the loans correctly and make things better, they are like free MONEY!
Cons of Loans
Well, there’s been a saying that nothing comes for free. If you are taking the loan, you must repay it with some additional amount (AIR). One of the primary disadvantages of loans is that in case if any business owner is unable to repay them; they have to sacrifice something bigger than they expect. For example, if you cannot repay the loan in equipment financing, then the lender can possess your business assets and sell them.
If you can repay the loan on time, there aren’t any cons. One caution is required, which is to watch out for scammers that put you under pressure with hidden costs that you discover after the contract. So always work with professionals and the right lenders.
Best Place to Get Business Loans
BitX Funding is the top lending agency. We aim to connect small businesses to financing options faster and more frequently than traditional alternatives. We offer all types of business loans on easy conditions so that BitX Funding can help individuals the same way we previously helped thousands of small businesses in their time of need! Other than loans, we also have room for business insurance.
