There are several types of small business loans, and it can be difficult to determine which type of loan is needed, not to mention where to turn for which type of loan. There are loans for specific groups of people, loans made only by specific agencies, and loans for specific purposes or circumstances.
Loans for Specific Groups of People
There are small business loans that are designed for particular groups of people. For example, small business loans for women, small business loans for Latinos, and small business loans for minorities in general. While qualification for these loans may not be as obvious as it sounds, for the most part those who fit into the right group can obtain such a loan. There are other factors that may come into play however, including the viability of the business plan.
Loans from Specific Agencies
The Small Business Administration is a specific agency that lends to small businesses, and they are the only ones that make their particular type of loans. One such loan is an SBA 7(a) loan. The greatest benefit of this type of loan is that it is made to businesses, not individuals. This means that the loan is made based on the business, not the owners. It can be used to start a new business, expand or operate and existing business, or to fund an acquisition. For advice on an SBA 7(a) loan, speak to a small business lending expert or see SBA.gov.
Loans for Specific Purposes or Circumstances
There are some instances where a specific situation or purpose dictates the type of loan needed. An example would be if an entrepreneur had bad credit. This borrower would need to look for small business loans for bad credit. While their terms are not always what is most desired, this type of loan does exist and can help get a business off the ground.
There are also loans for business equipment, startup loans, and loans for expansion among others. These are all intended to serve a specific purpose, and more often than not funds from these loans cannot be used for any purpose other than which they are designated.
It can be helpful to seek help from a site such as Biz2Credit.com. They automate the application process and can help with the application for SBA 7(a) loans as well as other types of small business financing. Whether the need is for accounts receivable financing, a cash advance or a small business line of credit, their network of 1,100 banks and non-bank lenders can help. Lenders include CDFIs, credit unions, VCs, micro lenders, personal asset lenders, and cash advance companies in addition to banks, and all specialize in lending to small businesses.
This article was submitted by Faith Stewart. Faith Stewart has a BBA with a major in accounting and spent 10 years working in the various aspects of accounting and finance before pursuing her passion for writing.