What are Your Small Business Loan Options? Three Tips for Evaluating the Choices

Small short term loans

Did you know that 16% of U.S. loans are purely for business use? It’s no secret that businesses often need capital, whether it’s because they’re a start-up that needs initial funding, or they’re a well established company that’s looking to expand or revamp.

Regardless of the circumstance, many people are unaware of what their full range of options are for business loans today. In what ways can you finance your business? Here are three tips for figuring this out.

1. Can I Get a Small Business Loan?

Yes. You will need to have a copy of your credit report, as well as essential financial documents, including balance sheets, a reconciliation of net worth, and your term of debt schedule. Loan companies will also want an idea of your projected future revenue and operations. If you find yourself stumbling over getting this together, now might be a good time to slow down and re-evaluate the direction of your business. According to financial adviser Dan Weil, the main options for receiving small business loans come from internet based lenders, traditional banks, loan companies, and the small business administration.

2. What Should I Expect from Short Term Small Business Loans?

In many cases you will want to fund 25% to 50% of your business from your own pocket; this shows lenders and investors that you are personally committed to seeing it succeed. When choosing a loan, keep in mind that many businesses collapse during their first four years- 56% of new business won’t make it- and their problem in many cases is under-financing and not being able to bounce back from the initial debt of opening up. Short term loans, as opposed to long term loans, will typically have higher interest rates, and the repayment period will vary from one to 12 months.

3. What Should I Look for in Small Business Programs?

There are more than 27 million small businesses in the U.S., and around 70% of new job creation links back to them. There are many organizations and companies that truly care about making sure that small businesses, such as yours, thrive and prosper. How do you find them? Look for small business loan programs that have former business owners on staff; they will understand your needs and restrictions. Companies that offer you business consultations in an effort to assist your overall growth will also be great resources.

What are your thoughts on business loans today? For more information, read this website.

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