SBA Loans are administered by the Small Business Administration, a federal agency that facilitates funding for small and medium sized businesses which may not be eligible for traditional bank loans. The benefits of SBA Loans include a wide range of loan sizes, low down payments, and extended repayment terms. The good news is that unlike a bank, we do not require your business to put up collateral, nor do we have industry specific exclusions. To determine if this type of loan is best for your business, consider what your credit profile looks like, and how quickly your business currently requires funding.
Fixed Term Loans
Fixed Term Loans represent loans for which a business borrows a lump sum of money and makes fixed payments over specific intervals of time. While both repayment periods and interest rates vary, once you are ‘locked in’ to a term and rate, your business can easily budget to stay on track with your customized repayment plan. Fixed Term Loans often have longer durations, resulting in lower interest rates so that operational cash flow can be utilized where it is needed most.
Unsecured Loans are loans that are generated based on the borrowers creditworthiness rather than any type of collateral. Qualifying for an unsecured loan is fundamentally easy, funding is fast, and the paperwork is minimal. While terms for unsecured loans are generally shorter than secured loans, businesses have complete flexibility on how to use their funds.
Business Line of Credit
A Business Line of Credit differs from a term loan in that it gives businesses access to a pool of funds and the flexibility as to when and how much funds to pull for capital. For a line of credit, interest is only collected on the funds that are withdrawn, meanwhile capital is available at any moment. In a way this is similar to a credit card which can be charged and repaid over a fixed timeframe, in accordance with an overall credit limit. When considering a Business Line of Credit, businesses should bear in mind the benefits of revolving credit such as maximum flexibility, low interest rates, and full control of capital.