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Every small business needs capital to grow, whether you’re just starting out or looking to expand. Small business loans provide the funding you need to move forward—covering everything from purchasing new equipment and inventory to hiring staff and boosting cash flow.
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A small business loan is a type of financing provided to entrepreneurs and small business owners to help them fund operations, expand their business, or manage cash flow. Loans can be secured or unsecured and come with varying terms and interest rates.
You can use a small business loan for a variety of purposes, including:
- Purchasing inventory or equipment
- Expanding your business
- Covering payroll or operating expenses
- Marketing and advertising
- Managing cash flow
- Refinancing debt
Common types of small business loans include:
- Term Loans:Lump sum amounts paid back over time.
- Lines of Credit:Flexible borrowing for short-term needs.
- SBA Loans:Government-backed loans with favorable terms.
- Equipment Financing:Loans specifically for purchasing equipment.
- Invoice Financing:Advances on outstanding invoices.
- Merchant Cash Advances:Financing based on future sales.
Yes, some lenders specialize in working with businesses with poor credit. However, these loans often come with higher interest rates and stricter terms.
- Secured Loans:Require collateral (e.g., property or equipment) and often have lower interest rates.
- Unsecured Loans:Do not require collateral but may have higher interest rates and stricter approval requirements.
- Consider the following when choosing a loan:
- Loan amount needed
- Repayment terms
- Interest rates and fees
- Lender’s reputation and support
- Your business’s financial situation