Business Term Loans
Description: A business loan usually for a specific major purpose, for a specific sum of money to be paid back during a fixed period of time at a fixed interest rate.
Basic Requirements: Most businesses can qualify for a traditional term loan, but the interest rate, length of the term, and maximum loan size depends on your business revenues and credit rating. Since traditional term loans have longer repayment periods than, say, a short-term loan, your credit score will be a more important factor.
Lending Amounts: $25,000 - $500,000
Maturity Terms: Fixed monthly payments for 1 - 5 years in duration
Business Lines of Credit
Description: The availability of any amount of money up to a predetermined maximum, to be used for any purpose or any amount the borrower deems necessary.
Basic Requirements: Many businesses can qualify for a business line of credit but it will be difficult for younger, less-established businesses to qualify. The maximum amount available, duration of the credit line, and the repayment terms depend on your business, revenues, credit rating, and many other factors.
Lending Amounts: $10,000 - $1 million
Maturity Terms: Variable monthly payments, either interest only or interest plus 1 - 3% of outstanding loan balance; no set payback term, however terms of agreement may be renewable every 1 - 5 years.
Equipment Financing
Description: A loan used to purchase equipment needed for the business. The equipment serves as collateral to secure your loan. Borrowing limits depend upon the type of equipment being purchased, expected life of the equipment and whether it's new or used.
Basic Requirements: Most businesses can qualify for equipment financing. How much you qualify for – and the interest rate you’ll pay – depends on the value of the equipment, your business history, and your credit rating. Equipment financing can be a great option if your credit rating is less than perfect, as the equipment collateralizes the loan.
Lending Amounts: $5,000 to $2 million
Maturity Terms: Fixed monthly payments for up to 10 years, depending on the useful life of the equipment financed.
SBA Lending
Low interest loans and lines of credit provided by participating banks and non-bank lenders. The Small Business Administration (SBA), a federal agency dedicated to helping small business grow, guarantees a large percentage of each loan issued. There a several lending programs that allow businesses to borrow for a variety of purposes including the supplementing of working capital, inventory acquisition, equipment purchases, buying real estate and refinancing other debt.
