What are the Different Types of Business Loans?
Small businesses have a wide array of loan options available to them, encompassing various types such as business lines of credit, invoice factoring, and merchant cash advances. Each loan type comes with its own set of advantages and disadvantages. Choosing the most suitable option for your business depends on the timing of your financial needs and the purpose for which you require the funds.
Outlined below are ten of the most popular types of business loans. It's important to note that loan terms, interest rates, and eligibility criteria differ among lenders.
Term loans are a widely used form of business financing where you receive a lump sum of money upfront and repay it with interest over a predetermined period. Online lenders offer term loans up to $1 million, providing faster funding compared to traditional banks that offer small-business loans.
Business Lines of Credit
Equipment loans are designed to assist businesses in purchasing necessary equipment, which may include financing options for semi-trucks. Additionally, there are business auto loans available for cars, vans, and light trucks.
The repayment term of an equipment loan is typically aligned with the expected lifespan of the equipment, and the equipment itself serves as collateral for the loan. The interest rates offered will depend on the value of the equipment and the overall financial strength of your business.