Smart Ideas: Experts Revisited
Different Types of Start Up Business Loans
It has been noted that every month, thousands of businesses are formed in the country. For a business to success, it needs enough capital for its operations, and if you are one of these start up business owners, that is what you are looking for. You need a business loan for keeping up with your business whether you are just starting a business, expanding your current one, or if you want to buy an existing one. There are business loans available for those struggling business owners who need funds to get their businesses on the go. The different types of startup loans are given below.
The Small Business Administration or SBA offers these different types of business financing. Although it is not directly from the government that SBA loans come from but from commercial lending partners that the SBA guarantee. There is reduced risk for this type of lending arrangement. The government sets the requirements for the loans and economic or policy changes, the terms of the loan can get affected. If this happens, you have options for SBA loan forgiveness.
A start up business loan can be used in many ways. If you have a new business, want to buy a business, expanding your current business, or simply need working capital, then you can apply for a business loan. Business loans are also necessary for construction, equipment, or buying real estate. Debt consolidation, or home or business repair after a disaster are the other uses of a business loan. Down payments and collateral may differ for these different uses of business loans.
If you are a business owner, here are some of the business loans that you can take advantage of.
Business owners that need working capital, money for buying real estate, for constructing or renovating building, or for debt consolidation can apply for 7(a) loans. This business loan is very common and flexible. You have a 10 year term for capital loans and 25 years for fixed asset loans for this type of loan with a maximum loan of $5 million.
You only need a small loan if your business is relatively new or beginning to grow. For your start up, if you need less than $50,000, you can apply for a microloan. It has a shorter repayment term of 6 years.
The CDC/504 loan program is a long-term, fixed rate financial for real estate and equipment. You can’t apply for this loan for working capital or inventory. You can loan up to $5.5 million for 10 or 20 year maturity terms.
Disaster loans are available for those businesses that have suffered because of a disaster. They can loan up to $2 million to repair real estate or damaged equipment.