For any new or existing business, taking out a loan is necessary and often stressful. Whether you have an established business and need some additional cash to expand or are starting a new business, you do need to understand the different business loan options that are available to you. Here are a few facts to get you started.
Credit Cards Are Not Always Your Best Option
Gigi’s Cupcakes got its start when the founder of the cupcake bakery maxed out her credit cards with cash advances. By the time she opened her bakery, she had just over $30 to her name. Happily, hers is a story of success, but it’s not always the case. With interest rates on credit cards at 13 percent or higher, a cash advance on a credit card can be a risky way to start a business. Maxing out your cards affects your credit rating and can be costly.
Compare credit card rates to things like an SBA 7A loan where the November 201 rate ranges from 5.75 to 8.25 percent, depending on the loan terms and amount borrowed. A peer-to-peer small business loan offers rates ranging from 5.99 to 36 percent.
Bank business loan products
currently start at rates of 6.25 percent. Many of these options are far more affordable than credit card cash advances.
Not All Loans Are Hard to Get
Short-term business loans are one of the easiest loan products to get. It’s just the first of many products that are out there. SBA loans are another option that helps business owners get the financing they need. While you may not think you’ll qualify for an SBA loan, it’s one of the best places to start. While some loan products, such as a traditional term business loan do require you to have run an established business for a couple of years, many options are perfect for a start-up or new business owner. When possible, try to get a line of credit so that you have cash available when you need it.
Interest Rates on Business Loan Products Vary Greatly
As you saw earlier, interest rates do vary greatly. Your business plan, assets, business history, and the amount you want to
all can impact your final rate. The best way to avoid disappointment is by using a site like CapitalLoanHub.com that compares rates for you. You have the power to shop around for the loan product you can afford and that makes you comfortable with the terms. Head to CapitalLoanHub.com today to compare lenders and loan offers. You’ll be surprised by what business loan companies can do to help business owners succeed.