You must hold ample cash to launch or upgrade your business. Because of this necessity, you must know where to get a small business loan. As always, acquiring a large amount of money entails a lot of obstacles that you must outsmart and overcome. Your potential lenders will demand a lot of papers, time, effort and dedication from you before they finally consider your small business loan application. Aside from dealing with the extremely strict rules that govern many lending institutions, you must also save yourself from getting fooled by fraudulent lenders. For your convenience, you must learn the proper choices you and other aspiring borrowers have.
Loans from Banks
Although there are bank loans that involve very high interest rates, there are also borrower-friendly ones. It is certainly possible for loan applicants to successfully obtain loans that can be cleared under a very long duration and that don’t involve very hurtful rates. However, decent bank loans are rarely obtained without passing through a lot of inconveniences. In addition, many banks will automatically disregard your application if you don’t possess any property that can act as your collateral. If you still wish to pursue bank loans despite all these difficulties, you just have to be reminded that various banks demand various sets of required documents and you must therefore consult your chosen lending institution about its specific requirements. It may be very beneficial for you to apply for a loan from a bank that has already known how reliable you are.
Loans from Government Bodies
Although government loans are typically hard to obtain, government agencies can be considered as very good answers to where to get a small business loan. Government loans don’t involve very high interest rates and they can be paid through multiple installments within several years. If you believe that the potential benefits of government loans outweigh the challenges they entail, you just have to seek the assistance of Small Business Administration. SBA will enable you to learn about currently available government loans.
Family and Close Friends
You can expect that your family and close friends will be morally supportive of your commercial pursuits. If any of them can also support you financially, you may ask that loved one or friend if he or she can become your lender. If any of your loved ones or closed acquaintances is willing to temporarily finance your business, you have to make sure that your transaction will be authenticated by a legally binding contract. You have to agree on the specifics of your loan acquisition and repayment. You just have to ensure that the borrowed money will be invested on a very productive or very promising commercial venture.
Business or personal credit cards can also serve as viable answers to where to get a small business loan. However, credit cards are riskier than many other possible funding options. Their interest rates may go beyond 20% and such rates are certainly way higher than the rates typically involved in government or bank loans. You may be interested in knowing that the CARD Act rules are only applicable to personal credit cards and they don’t cover business credit cards. You are strongly discouraged from utilizing credit cards for long-term funding purposes.