Almost every small-business owner requires a bit of financial help to start, run and grow their business at one point or another, whether that be to purchase new equipment, hire more employees or cover marketing expenses for a new product or service. However, the tricky part is figuring out how you are going to meet these capital requirements. There are many different types of business credit options such as credit cards, lines of credit, and small business loans, and so it can be quite difficult determining which one is best for your situation. Let’s take a look at the varying types of business credit so you can find the best one.
Business Credit Cards
This type of business credit is best for those companies that want rewards. Business credit cards are similar to traditional credit cards in that they often offer rewards for making purchases, like cash back for buying gas, office supplies, Internet access, etc. Many also offer a 0 percent intro rate, which means that you do not have to pay interest on your credit card balance for a particular period of time, typically between six and twelve months. If you go with this option, the important thing is to ensure that you pay off the balance before the 0 percent intro rate expires so that you can avoid the high-interest rate expense.
Small Business Loans from a Bank
Taking out a small business loan from a bank is best for those businesses that want to make a significant investment. They are guaranteed by the Small Business Administration and have a max loan capacity of $5 million. On the other hand, the maximum amount that you can receive from an online small business loan lender is $500,000. This makes taking out an SBA loan from a bank a better option for those who need more than $500,000 worth of funding.
Small Business Loans Online
After the recession, banks cut back on their lending to small businesses, which left many company owners high and dry. However, online lenders came to the rescue to provide funding to those who need it fast. This type of loan is best for those that are unable to qualify for a bank loan or can’t wait the several months it often takes to obtain one. They come with speedy funding and higher approval rates. You can also complete applications online in just a few minutes, and will be given the needed funds in only a few business days. This type of business credit is also great for those people that do not have collateral, as the majority of online lenders offer a loan product for less than $100,000 which does not require collateral.
Business Line of Credit
A business line of credit allows you to gain capital that you can use for a variety of needs. This type of credit is similar to a personal line that you would receive from a credit card. However, the difference is that it gives you access to much more funding than a typical credit card would. Additionally, you do not have to make any payments and won’t incur interest until after all of the funds have been tapped. A business line of credit comes both secured and unsecured and is usually considered to be “revolving”, which means that it can continually be tapped. This type of credit usually has lower closing costs and interest rates than that of a traditional bank loan for the same amount. However, if you go past your limit or do not make a payment on time, your interest rate will increase substantially.
- Loans from $5,000 - $250,000
- Fast Approval Decision
- No Complicated Paperwork
- Flexible Repayment Plans
- Bad Credit OK
- High Approval Rates
- Funds Direct Deposited
- Quick Online Application
- Term: 4 Months to 10 Years