Business loans can prove to be useful in numerous ways, from paying bills to investing in new technology. When the economy moves into periods of uncertainty, it’s important to maintain either a credit line or have access to lending options. If you need to pay a commercial mortgage in Nassau County, NY, or apply for a traditional small business loan, it’s crucial to compare interest rates so that you can get the best deal.
Small Business Loan
Don’t be overwhelmed by a wide array of choices involved with small business loans. It’s important to develop a clear reason to get a business loan, whether it’s to cover payroll, upgrade equipment or purchase a property. In addition, there are many other entrepreneurial reasons to borrow, such as to:
- Refinance debt to reduce the interest rate
- Hire new employees
- Purchase supplies
- Fund a patent, invention, or prototype
- Acquire another company
How to Choose a Business Loan
A business owner often has access to multiple sources of commercial loans. Applying for a government grant is helpful for a nonprofit organization or a small business. Other entities to explore for funding opportunities include conventional banks, credit unions, and other alternative lenders. Once you have decided on the amount of loan required, you can research potential lenders and their specific terms and conditions.
Types of Business Loans
Traditional Installment Loans – This type of loan involves borrowing between $20,000 and $5 million for 2 to 25 years. The annual percentage rate (APR) ranges from 4% to 36%. Installment loans involve making fixed monthly payments.
Business Lines of Credit – This type of credit line often ranges from $5,000 to $5 million at an APR of 6% up to 80%. It’s available for the company to use at any time, making it useful for overcoming a shortage in cashflows.
Short-Term Loans – These loans are typically expected to be repaid within 3 to 36 months. They carry an APR that ranges from 8% to 99%. People who use these loans usually repay them on a daily or weekly basis.
Merchant Cash Advances – This alternative type of special financing does not involve a loan. Instead, a cash advance provider forwards cash to pay for future revenue at a discount.
Equipment Loans – Similar to traditional installment loans, equipment loans pay for business machines and gear and are repaid with fixed monthly installments.
Other Considerations
An important question to ask when looking for a business loan is how quickly do you need the cash? The level of urgency will affect the decision to apply for a certain amount subject to the lender’s terms and requirements. It’s important to ask the lender about the interest rate and other fees associated with your loan.
Once you’ve decided on the lender who understands and fits your business needs, you can apply for the loan online, which is the fastest way to get approved. Contact us at Northeastern Group, LTD to learn more about how we can help you get the funding your business needs. We are here to help you move towards achieving your financial goals.
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