The vast majority of people who apply for business loans do so through their banks first and foremost. Banks offer some of the best interest rates and competitive products out there, but in most cases, you will need to be excellent credit in order to qualify. Here are some of the types of business loans that your bank might offer.
When you have to pay more than one year, it is considered a long-term loan. These may be secured or unsecured, and they will often If you have good credit, you can obtain long-term loans with credit interest and no collateral. However, if you have less than average credit, you might need to put up a lot of money.
A short-term loan is a lump sum of money that you repay in a year or less. In fact, some short term loans are repaying periods. These are great ways to help sustain your business during a rough patch, but once again, you will likely need your credit card. Even those with good credit find themselves paying higher-than-average interest rates on these types of loans.
Business Lines of Credit
Most major banks offer business lines to those who have good credit. These work much like credit cards in which they consist of revolving credit that you can use and repay as you see fit. You can use a business line of credit for everything, including the purchase of equipment, renovations, acquisitions, accounts payable, and more. These loans are, however, so important to use them wisely.
Business Equity Lines of Credit
If you have a business mortgage, it means that your bank holds a lien on your property and equipment, you can qualify for a business equity line of credit if your business is worth more than you still owe on your mortgage. For example, if your business is worth $ 2 million and you owe the bank $ 500,000, then you have $ 1.5 million in equity that you can borrow against. This is a great solution for business owners who have less than perfect credit ratings but who need access to cash.
Banks offer a variety of products designed to help business owners get the cash they need in a variety of circumstances. While others are best used in emergency situations, others can be obtained to help your business grow into its true potential.