How Unsecured Company Loans Can Work for You

A term loan is a popular method of corporate finance. You get a lump amount of cash in advance, which you eventually reimburse with interest over a fixed duration. Internet companies provide up to $1 million in term loans that will have easier lending than banks providing small business loans.

Pros:

• Get cash upfront to invest in your company.
• Usually higher borrowing Amounts.
• Quick lending if you use an online lender rather than a conventional bank; usually a few days a week vs a few months.

Cons:

• can include personal assurance or collateral—an asset such as real estate or business assets that the lender can sell if you default.
• Costs can vary; term loans from online lenders usually face higher costs than those from conventional banks.

Perfect for:

• Company seeking to grow.
• Borrowers who have good credit and a solid company, and who don't want to wait a long time for financing.

The Small Business Administration guarantees the loans provided by banks and other lenders. Repayment periods for SBA loans rely on how you intend to use the money. They span from 7 years of working capital to 10 years of purchasing machinery and 25 years of the purchase of the real estate.

Pros:

• some of the lowest retail rates.
• Strong leverage is up to $5 million.
• Long terms of repayment.

Cons:

• Hard to apply for this.
• Long and comprehensive implementation method.

Perfect for:

• businesses trying to extend or refinance current loans.
• Strong-credit investors who have a long time to wait for financing.

A credit line offers access to funds up to the credit cap, and you incur interest only on the money you've received. It will provide greater versatility than a term loan.

Pros:

• A versatile method of borrowing.
• Usually unsecured, so no collateral is needed.

Cons:

• can bear extra expenses, such as repair fees and draw-up fees.
• High sales and credit standards.

Perfect for:

• short-term funding purposes, cash flow control, or unforeseen handling.
• Seasonal corporation.

Equipment loans help you purchase equipment for your company, possibly involving heavy-duty vehicles. (Business auto loans for automobiles, vans, and light trucks are available.) Usually, the loan duration of the machinery refers to the estimated life period of the equipment and the equipment acts as security for the loan. Rates would rely on the value of your equipment and the strength of your company.

Pros:

• You own the machinery and you create equity in it.
• If you have good credit and company finances, you will get reasonable rates.

Cons:

• You can have to make a down payment.
• Equipment will get out of date quicker than the duration of the funding.

Perfect for:

• a company that needs to own machinery.