Maybe you want to expand your business, but don’t have the funds for it. Or perhaps you’ve done various traditional loan applications bordentown nj, but don’t qualify. Luckily, there are many alternative loans out there you can apply for. Alternative lenders tend to have low requirements for loan qualification, which can give you a higher chance of qualifying for a loan so that you can pay for your business-related expenses. There are various types of loans you can get from an alternative lender.
Types of Alternative Loans
- SBA loans: SBA loans are loans that are guaranteed by the Small Business Administration. SBA programs allow you to borrow money for nearly all business purposes such as purchasing inventory, buying equipment, working capital, buying real estate or refinancing other debt. SBA loans tend to have long payment terms and reasonable interest rates, which make them affordable for many business owners. However, getting an SBA loan may involve filling out lengthy paperwork and waiting long periods of time before approval. Also, some SBA loans require collateral.
- Business lines of credit: With a business line of credit, you can gain the flexibility that regular business loans don’t offer. With a business line of credit, you borrow a certain amount and only pay interest for the portion of the money that you borrow. Similar to how credit cards work, you could face a number of consequences with a business line of credit. As long as you make payments on time and don’t exceed your credit limit, you can reuse and repay your business line of credit as frequently as you’d like.
- Term loans: A term loan allows you to borrow money for a specific purpose. Then, you pay the money over a set amount of time. The payments are often a fixed amount. A term loan can either be short-term or medium-term.
Whichever type of loan you choose to fund your business operations, make sure you’re able to pay it back. If you don’t, it can negatively impact your credit and reduce your chances of getting a loan in the future.