You're a business owner and you need some money to help your company grow. You could go the traditional route and apply for a small-business loan through your local bank, but that can be time consuming and sometimes difficult. Or you could take advantage of online lending options which are available from many different sources, including business loans or even invoice financing. Online lenders offer these types of funding options because they understand just how important it is for businesses to have access to capital so they can continue growing their companies.
Small-business loans are an easy and accessible way for entrepreneurs to finance their business operations. The loan is often secured by the assets of a company, which can be pledged as collateral if the borrower defaults on paying back the funds.
Securing your financing means that it's guaranteed under law in case you don't pay what you owe. Small-business lenders offer many types of security when they provide funding: equipment or inventory may be used as collateral; there might also be a lien placed against personal property such as automobiles, boats or real estate owned by either the owner/borrower or a spouse; equity stakes in other companies may serve as guarantors too - these examples show just how flexible small-business lenders can be when they provide the financing for your company's needs.
Your banker, attorney or accountant might suggest an appropriate source of business funding; you could also research local banks and other lending institutions in order to compare interest rates and terms offered by various sources.
One of the most common questions for small-business owners is, "What type of financing options should I consider?" And as you ponder your answer to that question, here are some things to keep in mind:
* Keep it simple. If your business needs only one loan or line of credit – because its size and goals don't require more than a single lending source - then by all means stick with simplicity. But if you need multiple sources of funding, then it's time to explore various possibilities from banks to SBA loans and online lenders.
* Look at the big picture first. Before you focus on any particular choice, think about how much money will be needed now and over what period; which types of assets can serve as collateral; which loan terms best suit your needs; and how much paperwork is involved with filling out an application.
* Consider the borrower's credit score. A lender may not be willing to offer a small-business owner financing unless that person has a good or excellent credit history - so, if you're planning on applying for any type of business loan or line of credit, find out now what your current FICO score is and make sure it meets requirements before proceeding.