Member Article

Different Types of Small Business Funding Options

When it comes to funding small businesses, there are a number of different types of loan products available. Figuring out which option is right for your business is even more difficult than qualifying for the loan. Here are a few things you should know about lines of credit for small businesses.

line of credit for small business

One of the most popular and useful loan products is a line of credit for small businesses. These loans are the one type of loan that no small business should be without. Most small business owners use these as a permanent funding solution that ensure that there is never a cash flow shortage in their businesses. They carry low interest rates, provide a revolving credit line that can be accessed over and over and offer flexible repayment terms.

Installment Loans

Installment loans for small businesses are just like personal installment loans in that the provide a business with a fixed amount of cash in exchange for regular monthly payments. In many cases, they are secured by collateral and are often used to make larger purchases like equipment. Because they are secured, they can oftentimes be easier to get than other types of unsecured credit and often offer lower interest rates.

Interim Loans

Small businesses often utilize their working capital to fill orders. This means that there is little left over for things like building new facilities. Interim loans pay contractors for their services while services are being provided. The interim loan is repaid when the small business owner takes out a mortgage on the building.

Small Business Credit Cards

Many small business owners carry small business credit cards to help offset cash flow shortages. In addition to being easy to use, they offer revolving lines of credit that can be accessed over and over again. Interest rates on credit cards tend to be higher than other options and while repayment terms are flexible, not repaying the balance in full every month will cost you a pretty penny. Plus, because they are unsecured, getting one with a high enough limit to be helpful to your business takes great credit, both personal and business.

If your company hasn’t been in business very long, this might make it tough to qualify for a small business credit card.

And these options barely cut the surface of the types of loans that are available to small businesses.

Choosing the right funding option for your business can be complicated. Business Line Credit Hub can help you make sense out of all of the options that are available to you. Visit today to read through their many useful blog articles they have provided that go more in depth on the many options small businesses have for funding. Then, if you still have questions, you can contact them directly and work with a knowledgeable representative.

Want to learn more about the benefits of having a line of credit for small business? Visit Business Line Credit Hub today to learn more about the benefits of revolving business lines of credit.

This was posted in Bdaily's Members' News section by Anna Johnson .