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Start Up Businesses and Business Loans

You will note that at this present time, so many businesses are appearing on the scene almost every month. For a business to success, it needs enough capital for its operations, and if you are one of these start up business owners, that is what you are looking for. There are start up businesses, expanding businesses, and businesses that are transferred to new owners that need business loans for the upkeep. There are business loans available for those struggling business owners who need funds to get their businesses on the go. If you want to know what these business loans are, they are discussed in brief below.

It is the SBA or Small Business Administration that offers different types of business financing. Although it is not directly from the government that SBA loans come from but from commercial lending partners that the SBA guarantee. With this arrangement, the lender and borrow risks are reduced. It is the government, however, who sets the requirements of the loan, and its terms can get affected when there are changes in economy or in policy. If this happens, you have options for SBA loan forgiveness.

You can get a business loan for many types of business needs. If you have a new business, want to buy a business, expanding your current business, or simply need working capital, then you can apply for a business loan. Business loans are also necessary for construction, equipment, or buying real estate. If you need to consolidate your debts, or if you need to repair your home and buildings after a disaster, then you can also apply for a business loan. These different uses of business loans have different requirements for down payments and collateral.

If you are a business owner, here are some of the business loans that you can take advantage of.

If you need working capital, want to buy estate, construct or renovate buildings or consolidate your debts, then you can use a 7(a) loan for these purposes. Among all the types of business loans, this is the most common and the most flexible. The maximum loan you can get for this type of loan is $5 million for 10 years for capital and 25 years for fixed assets.

You only need a small loan if your business is relatively new or beginning to grow. Small loans are called microloans which you can apply for if you are a start up that only needs an amount less than $50,000. In this type of loan, repayment terms are shorter which is 6 years.

The CDC/504 loan program is for real estate and equipment loans which is a long-term, fixed rate financing. You can’t apply for this loan for working capital or inventory. The maximum loan amount is $5.5 million for a 10 or 20 year maturity term.

Disaster loans are available for business that have suffered natural calamities. A maximum loan of $2 million can be applied for to repair damaged real estate or equipment.