If your business needs an influx of cash, a loan can be the perfect solution. But with so many different types of small business loans available, finding the right one for your needs can seem like a monumental task. You may wonder where to apply for a small business loan or how to apply for a small business loan with bad credit.
The following guide offers a quick look at some common options and answers a few of the most frequently asked questions. Let’s get started.
Types of Small Business Loans
1. Term Loans
When most people start looking for small business loans online, a term loan is what they have in mind. This type of loan allows you to receive a lump sum of cash and pay it back over a set period of time, often at a fixed interest rate. This allows you to easily plan ahead so you can budget for your monthly payments.
Term loans may allow you to access more funds than some other types of online small business loans and there usually are no restrictions on how you can spend the money you receive. Depending on the lender you choose, you may need to provide a personal guarantee or collateral, so be sure to read the fine print before you commit.
It’s also important to note that while there are many small business online lenders to choose from, they’re not all the same. Before you move forward with this option, be sure to do your research so you can be confident that you’re working with a reputable lender.
2. Merchant Cash Advances
If you’re wondering how to apply for a small business loan with bad credit, a merchant cash advance might be a good solution for you. This option involves trading an upfront amount of cash for a percentage of your future credit card sales. Since a merchant cash advance is not technically a loan, you’re more likely to get approved even if you have credit issues.
To qualify for a merchant cash advance, you’ll need to show that you’ve been in business for a certain amount of time and that you have at least the required minimum amount of credit card sales each month. For example, Zinch offers merchant cash advances to businesses that have been operating for at least six months and that have a minimum of $10,000 in monthly sales.
A merchant cash advance can be a good choice if you haven’t had time to build up your credit and you don’t want to worry about putting down collateral (other than your future sales). It’s also a great option for certain types of businesses that frequently accept credit cards–like retail stores, restaurants, and salons.
3. SBA Loans
A Small Business Administration (SBA) loan can be an excellent low-cost alternative for small business owners. These loans have some of the lowest rates in the market, offer high borrowing limits, and boast long repayment terms. However, they are also notoriously difficult to qualify for. The application process is both long and rigorous, so if you’re looking for quick and easy cash, this may not be the best choice for you. However, if you have strong credit and time to wait, you may find that it’s worth exploring.
4. Business Line of Credit
A business line of credit works similarly to a credit card. With this type of small business loan, you’ll have a revolving credit limit that you can typically access through a checking account. You can borrow up to your approved maximum credit limit and continue to access funds as you pay back your balance.
This can be a good choice if you’re not quite sure how much money you need since you’ll only owe interest on the amount you actually withdraw. Business lines of credit are often unsecured, so you may not need any collateral to get one. However, lenders often require strong revenue and a good credit score. There may also be additional costs, such as maintenance fees.
Some business lines of credit will also require you to make a personal guarantee. This means that you’ll be personally liable if your business is unable to repay the loan.
Zinch Offers Quick and Easy Small Business Loans
If you’re looking for a way to get a quick and easy business loan without the hassle, Zinch is here to help. Contact us at (714) 500-6622 to learn more about your options. You could qualify for up to $250,000 in just 24 hours.
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