If you own a small business or you are getting ready to launch one–especially a brand new startup–getting a small business loan will almost always be a big part of your business plan. It is rare that individuals have the necessary feed money to start a small business without assistance from an outside source.
US News & World Report has this to say about small business loans, “According to the National Small Business Association, 69 percent of small businesses used financing in 2016, including loans, credit cards, venture capital, and crowdfunding. The remaining 31 percent were not able to obtain adequate financing. The NSBA report indicates small business loans are a key component of economic growth for small businesses and their employees. There is a direct correlation between small business financing access and the ability to hire employees.”
Roseland Associates Explains Types of Loans
In this article from Sweet Startups, Roseland Associates goes into great detail about the pros and cons of loans and the variable types of loans available, for both individuals and small businesses. The types of loans they list are as follows:
- Unsecured Loans
- Secured Loans
- Fixed Rate Loans
- Debt Consolidation Loans
- Variable Interest Loans
- Secured/Unsecured Lines of Credit
If you are thinking of applying for a small business loan or any other type of loan, you would do well to read that article from Sweet Startups, where each type of loan listed above is covered in great detail.
However, we strongly suggest you do even more research before choosing who you will apply for a loan with. Below are some good initial questions to answer so you have clear goals set before you start your research.
- How much money do you need?
- What do you need the money for?
- How long will it take you to pay it back?
- How long have you been in business?
- What is the current financial shape of your business?
- How much collateral, if any, do you have to put up for the loan?
- What’s your credit score?
- Do you have any other outstanding loans?
- Are you looking for a short or long-term loan?
Once you’ve answered these questions, it’s best to consider the several different types of loans and decide which is best for your business. From there, you can learn about which lenders offer which types of loans and apply to the best company.
Getting a loan to launch your small business is not something to be taken lightly. But if you do the proper research and have a solid business plan, you should be able to obtain just the right loan for your small business. We wish you luck with your endeavor!