Purchasing Resources for Business Loans

Business Loans Basics

Business loans basics for all businesses
By Sandy Baker Business loans provide businesses with the ability to open their doors and to keep them open. A business of any size may apply for a private or bank loan. Small businesses often have specialized loans available.
 

Business lenders consider credit an important part of the qualification process. If the business is new, without a credit history, the owner of the business may use his or her credit to qualify for the loan. Once the business is established, it may be able to stand on its own credit. When looking for loans, consider the following:

1. Choose unsecured business loans for loans without collateral including lines of credit.

2. Consider secured loans based on the value of equipment, real estate or other valuables for a lower interest rate.

3. Get estimates for new business loans from national and local lenders to compare their rates and terms.

Learn about start-up business loans for a new business venture

Business start-up loans provide funds for the purchase of anything required to get the business open. These loans can be secured loans on equipment and property or unsecured lines of credit for other expenses. Some businesses borrow enough through their start-up loans to pay the business' expenses for the first three-to-six months in operation.
Try: Compare business start-up loans carefully. Look at interest rates, terms and the amount the lender will provide. For unsecured start-up loans, consider American Express, which offers a range of credit lines to businesses just getting started. They provide reward programs as well. Wells Fargo offers business real estate financing, equipment financing and lines of credit up to $100,000.

Determine if private business loans are available

When it comes to private lenders, business loans are a substantial part of their investing. This type of lending allows for borrowers to obtain money from investors, companies or others that are not associated with commercial banks. Generally, the process requires a less stringent approval process, with lower credit requirements. Some private lenders are every-day citizens.
Try: Obtain a business loan from a private lender locally by finding a partner or equity investor in the company. Consider third-party resources to find private investors including Second Venture, where the company helps businesses build capital by connecting investors with them. Consider working with NCH Corporate Headquarters  to find the private lenders you need. For real estate investments for the business, consider private commercial lenders like Madison Realty Capital.

Find government business loans

Small business loans are available through the federal government. These loans are federally backed loans for a variety of business needs including start-up, real estate purchases, equipment purchases and expenses. These loans typically have lower interest rates and help millions of small businesses to start or remain open.
Try: Apply for a bank business loan through the Small Business Administration, the division of the federal government that provides small business loans. They offer disaster assistance loans, start-up loans, equity capital and surety bonds. To work with the SBA go through a commercial lender that will help you qualify for these government funds. Some businesses can qualify for specialized economic development loans through the Economic Development Administration, which is part of the U.S. Department of Commerce.

• Investments in commercial business loans often require a well-planned, professional looking business plan. The business plan allows the lender to see who is running the company, the cost of doing so, the way the money will be spent and why the business will be profitable. It convinces them to lend to the business.