Whether you’re just getting your business off the ground or you run a well-established company, you may find yourself short on funds. To choose the right type of loan for your needs, consider:
Based on these criteria, one of four common loan types should be able to cover your expenses.
Traditional bank loans provide your business with a set amount of money that you pay back with interest over time. Loans can be long-term or short-term and have different interest rates depending on their payment periods.
Banks generally require you to present a business plan and some form of collateral before they’ll consider giving you a loan.
Proof of a good credit score is also necessary, and the approval process can be long and complicated. These loans are best for expenses associated with big equipment purchases or extensive renovations.
When you need a short-term solution for cash flow problems, a business line of credit grants you access to pre-approved funds that you can tap on an as-needed basis. Instead of getting money up front, you draw on the credit in increments and only pay interest on what you use.
Making payments on time is good for your credit rating, but you don’t want to become dependent on a line of credit to fund your business. Interest can build up quickly, and you could find yourself in a worse financial situation than when you started.
Obtaining a loan from an alternative lending source is faster than getting a bank loan and the financing can be used for a variety of different projects:
The ways you can use an alternative business loan are endless and when you borrow from ARF Financial you can be approved in 48 hours or less. Each loan processed through ARF Financial is brokered through a real bank meaning you enjoy benefits like tax deductible interest!
You can also start the application process online whenever is most convenient for you. No business plan is required, in fact the paperwork you’ll need to fill out and provide is minimal.
When you get money from an investor, they’re actually buying part of your business and wind up with a vested interest in its success. This has both pros and cons for you as a business owner. One the one hand, investors want to see your business do well. On the other, they’ll expect a consistent return on their investments over time.
Angel investors, individuals who put forth extremely large amounts of money to fund businesses they believe in, may be particularly demanding when it comes to the progress they expect from your company.
This type of financing is usually not advisable for local businesses like restaurants and hotels because it requires you to give up control in your business. It also means you have to split your profits with someone else. Many small business owners obtain a loan through ARF Financial to pay off investors and regain full control of their company.
Always shop around for the best option before taking out any kind of business loan. Familiarize yourself with the terms, and get all of your questions addressed. Stay on top of payments to preserve your credit score and establish a good reputation with lenders and lending institutions. The more trustworthy you are, the easier it will be to obtain funds in the future.