Small Business Loans

As entrepreneurship becomes more and more popular, more people are seeking out small business loans in order to fund their ideas for new products and services. If you don’t have any seed money or investors, a small business loan might be the best place to start so it’s a good idea to research your options before signing any agreements or contracts.

Getting Started

When you’re just getting started, if you don’t have a solid base of customers, there’s not a real way to make a profit to grow your business. Or you might be in a position where your business is starting to grow, but you’re having an issue keeping up with demand and possibly losing customers because of that, making it difficult to expand. Whatever the reason you are seeking a small business loan, figuring out just how much money you need to solve your growing pains is very important before applying. Map out exactly how the money will be used and make sure all expenses are truly necessary so you are not requesting more money than is actually necessary, since you will be on the hook for the payments out of your profits.

Applying For The Loan

The loan process will vary depending on the lender, but in most cases you will need proof that your company needs the funds. Just like with any other loan, the lender wants to make sure you will be able to pay the funds back and that your business isn’t likely to fail before doing so. You will also need to provide documentation from your business like receipts, expenses and bills, and anything else requested from your lender in order to get approved.

Repaying The Loan

Just like the approval process will differ depending on the lender, so will the interest rates. It’s a good idea to research interest rates as they can vary depending on the market and lender, but these rates will make a big difference in your monthly payments and how much you can afford to take out for the loan.

Types of Small Business Loans

  • SBA loan- government-backed loan with good rates and terms
  • Business term loan-a typical small business loan
  • Commercial mortgage- used to buy, build expand or refinance
  • Business acquisition loan- used to purchase an existing business or franchise

If you are thinking about starting a business and you are part of a rural community, you could qualify for a loan from the U.S. Department of Agriculture. USDA loans are used to help the community promote job growth and boost the economy. In order to qualify your business will need to be located in a rural area outside of a city with a population of fewer than 50,000. You will also need to put up some sort of collateral that is worth the value of the loan.

Other Types of Financing

  • Business line of credit- funds available when you need them and you pay the interest
  • Equipment financing- designed to finance equipment needed for your business
  • Startup loan- financing based on credit in order to grow your business
  • Business credit card- used for business expenses and some have 0% interest rates

Contact Us Today!

Small businesses are a big part of many communities and getting funding to help them grow is where private funding can help. Reach out to the team at KC Investor Funding to discuss your options today!

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