These tend to be slower with more rigorous loan underwriting criteria. Large commercial banks. The traditional lenders to the small business market are banks such as Wells Fargo, JP Morgan, and Citibank.Sites such as Fundera and LendingTree offer you access to multiple lenders, acting as a lead generation service for lenders. Reputable companies such as Swift Capital provide very fast small business cash advances, working capital loans, and short-term loans in amounts from $5,000 to $500,000. Direct online lenders. There are a number of online lenders that make small business loans through a relatively easy online process.There are more lenders than ever before willing to lend to small businesses, and many of the lenders can be found from a simple online search. There are more lenders than ever before willing to lend to small businesses. Cashback and rewards programs allow you to earn rewards from purchases on the credit card. Many credit cards offer promotional introductory rates of 0% for a short period of time (6-9 months). Issuers of small business credit cards include American Express, CapitalOne, Bank of America, and many others. Many small business credit card issuers require the principal owner to be co-liable with the company. Interest rates will vary depending on the credit card issuer, the amount available on the card, and the creditworthiness of the holder of the card. Small business credit cards. While some business owners may be wary of using them, small business credit cards can also act as short-term small business financing.Equipment loans can also sometimes be structured as equipment leases. Loan amounts normally range from $5,000 to $500,000, and can accrue interest at either a fixed or variable rate. The loans can be used to buy equipment, vehicles, and software. Interest on the loan is typically paid monthly and the principal is usually amortized over a two- to four-year period. This typically requires a down payment of 20% of the purchase price of the equipment, and the loan is secured by the equipment. Equipment loans. Small businesses can buy equipment through an equipment loan.Visit the SBA website to see a list of the 100 most active SBA lenders.
However, the loan process is time consuming with strict requirements for eligible small businesses. Loan amounts range from $30,000 to as high as $5 million. Because of the SBA guarantee, the interest rate and repayment terms are more favorable than most loans.
Companies use such loans to manage fluctuations in revenues and expenses due to seasonality or other circumstances in their business.
Accounts receivable financing. An accounts receivable line of credit is a credit facility secured by the company’s accounts receivable (AR).
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If the line is not renewed, you will be required to pay it in full at that time. However, most lines of credit require renewal annually, which may require an additional fee. Interest is typically paid monthly and the principal drawn down on the line is often amortized over years. There will typically be a fee for setting up the line of credit, but you don’t get charged interest until you actually draw down the funds. There will be a cap on the amount of funds accessible (e.g., $100,000) but a line of credit is useful for managing a company’s cash flow and unexpected expenses.
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