Business loans can be defined as money lent for a specified amount of time at a specific interest rate to a specific person or people that operate a business or plan to operate a business.
One of the first things personal business owners need to do is establish business credit. Business credit can help you get a business-only loan without using your personal credit. Establishing business credit can be done by:
1) Opening up a business credit card account and paying it in full.
2) Buying equipment and supplies from companies that will report good standing to the business credit bureaus.
3) Having a good business plan with potential earnings, letters of intent, and any type of customer contracts already laid out.
4) In-depth business plans are required, so be prepared to spend days working on just the certification paperwork prior to applying for a business loan. A business only loan can be obtained in the business name without use of personal credit as long as the business can justify the loan amount and the ability to pay it back.
Different types of business loans are available
• those secured with collateral,
• non-secured loans which are based upon the credit worthiness of the applicant,
• government loans for small business ventures, women and minorities,
• Government loans.
The basis for a loan varies:
• Acquisitions or a loan to acquire an existing business
• Inventory loans
• Account Receivable Loans
• Working Capital Loans which convert a company's assets into working capital
• Equipment Leasing
• Commercial Property loans
• Warehouse financing
• International business loans
• Franchise loans
by J. Williams |