So you’re starting a business. You’ve put in the long hours and sleepless nights. You’ve kept your day job, or you’ve picked an another one or two. You’ve exhausted your own personal assets, your savings account. You’ve leveraged the faith your family and friends have in your vision, and borrowed money for them. If you’re finding that it’s not enough, a loan might be something that could help you out. There are a variety of ways, and a variety of amounts, that you can opt for.
Below are some ways you as a small business owner or startup can borrow money.
An installment loan is a type of personal loan for a large amount of money. It can be paid back in the long-term, in small affordable payments. They can be used to consolidate debt, rebuild your credit, or fund a business venture. Installment loans are types of loans that require you to make monthly payments. These monthly payments are in the form of equal payments, that cover both the principal and interest.
While installment loans are more useful for the long-term, there are short-term loans available. If you’re not looking for a lot, and you need it quickly, a short-term loan is possible. You can borrow anywhere from $100 to $1000. You’d be surprised how it works can be as simple as filling out an application online. Short-term loans, like payday loans, can be incredibly convenient but they carry heavy interest rates.
A personal loan, unlike a mortgage, can be used at your discretion. You can borrow as little as $1000 or even up to hundreds of thousands of dollars.There are two common types of personal loans.
- Secured Loans
To get your small business of startup off the ground, you could take out a secured loan. A secured loan, requires some kind of collateral. This collateral acts a secondary payment source. Some examples of collateral could be a car or your home equity. These types of loans require collateral in case you the borrower should default on the loan.
- Unsecured Loans
Unsecured loans, as you’ve probably guessed, is the opposite of secured loans. An unsecured loan requires no collateral as a secondary payment source. However, the lender needs to consider you a low-risk before a loan is granted. As a brand new business, it’s unlikely that you’ll qualify for one. But that doesn’t mean you can’t try.
Line of Credit
This type of loan is most useful for small business owners and startups. A line of credit usually carries the lowest interest rate a bank can offer. Much lower interest rates than credit cards. But make sure you pay attention and read the fine print before agreeing to anything. Some banks may choose to include a clause. A clause that can give them the right to cancel the loan.
If you’re committed to getting your business or startup off the ground there’s a loan out there for you. No matter the business venture, it’s possible to get as little or s much as you need.