What is a business loan?
A business loan is a loan specifically intended for business purposes, such as buying a new machinery, expansion or paying future invoices. The loan is repaid with added interest.
Secured and unsecured business loans
Business loans may be secured or unsecured. A secured loan involves collateral, an asset, such as equipment, stock, real estate or a vehicle pledged against the debt. In case if the debt is not repaid promptly, the lender may repossess the secured asset.
Unsecured business loans do not involve collateral, but the lender will still have a general claim on the borrower’s assets the loan is not repaid.
Short-term or long-term small business loans
The term of the loan is up to the borrower and his/her financial situation. In some cases, a borrower may want to borrow money for a short period of time, for example, to buy inventory available at a discount for a limited time, or marketing opportunities. A small business loan for a short term can be a better option to taking a loan with multi-year repayment.
Business loan from $5,000 to over $250,000
You can apply for any amount that meets your financial needs and that you can afford to pay back.
Business loans for bad credit
A less-than-perfect credit can be problematic. It’s all up to individual lender to look into your financial situation and evaluate the risk. No lender wants to get you into trouble, and you don’t want to get into more trouble than you already are. You can always apply and see if you and a lender can work out a sensible agreement. In the application you must select your current credit rating (poor – under 600, fair – between 600 and 640, good – between 640 and 720, excellent – 720+).