Business Loan OptionsOptions for business loans
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Comparing Business Loan Options
When considering a business loan, it is hard to know what is best for your business. It is a wide open industry with many different types of product and vendors to select from, and the right options depend on the features of your business. Below are a few ways to quickly isolate your options to find the best financing options for your business.
Corporate loan or corporate financing? Entrepreneurs often use the word "business loan" as a trap for the whole business world. Yet, to the investor themselves, commerce debt is related to a medicine unit of commodity within corporation economics - an cardinal discrimination to be alert to when exploring your decision making.
A corporate loan has an amount, a maturity, an interest payment and usually firm monetary amounts. So the first thing to ask is whether a commercial loan is the right choice or whether you would be better off with another type of loan such as invoicing or investment financing.
If, for example, most of your income comes from client bills, billing financing makes a great deal of sense and may be a better option than a business loan. Similarly, if you want financing to buy machines, the equipment financing is conceived for this end and could work best. Safety is a key component of all types of corporate financing.
Corporate credit can be divided into two classes, collateralised and uncollateralised, and there are some important discrepancies between them. Collateralized credit is usually provided on things like business premises, machines and cars, and the value of the article usually defines the amount you can lend (e.g. up to 75% of the re-sale value of the asset).
On the other side, uncovered credits do not need an asset, but are more directly related to the strengths of your company. Creditors who offer uncollateralised goods will want to see big winnings and at least a few years of commercial experience and usually need a face-to-face warranty - so your face-to-face loan record as a manager comes into it.
However, the major areas where collateralised and uncollateralised credit differ are that collateralised credit is often less expensive because the creditor with an underlying financial instrument has more faith in his commitment. Conversely, uncollateralised credit is usually quicker to secure, as without assets there is no need for the creditor to pay a fee or make a value assessment.
The amount you can lend also varies depending on the value of the assets on a secure loan - if your business is large enough, you may be able to take out significantly more uncovered loans. Need some agility? For those who value the importance of having great levels of liquidity, take a look at revving lines of credit as well as other variable rate instruments like these.
Most of these are like conventional banking arrears, so you get a pre-approved loan line and can dive into financing if you need to. Not only are your flexible options based on your current account balance, but if your business is right, commodities such as dealer loans and billing financing can also be useful for your bottom line management.
"Swifter than the banks" is a sentence you will see a great deal in alternate financing, and while some receivables are more doubtful than others, velocity is definitely an area where the alternate suppliers have the advantage. There are some items such as revolving loan lines that allow you to deposit funds into your bank within a few working days of your authorization, and if you need the funds quickly, these are your best options.
However, if your needs are not quite so pressing, it may be wise to wait for a longer recruitment period to find a more appropriate one. Even the promotional items with an accent on pace are often more costly because they charge interest on a weekly or daily basis - generally you get the lowest interest rates with a regular business loan.
While there are many ways to benchmark corporate credit, these approaches should help you quickly isolate them. Ultimately, with such a broad array of loan options available, the search for the right options will depend on your needs. Explore 10 financing opportunities for your business and how to submit your application in our Start-ups and Small Business Guidelines.