As a business owner there are plenty of options for how to get the lending you need to fund that new project you have in mind or the expansion for your building. Whatever your goal may be there is likely lender out there who is willing to finance you. Here I will introduce you to some different loan variations that may be perfect for your needs.
1. Line-of-Credit Loans
Line of credit loans are possibly the most useful loan type available to you as a business owner and certainly one of hte most common. These loans are intended to help with monthly expenses and keep working capital available in your business’ checking account. They are not designed for you to make large purchases like buying equipment or real estate.
2. Installment Loans
Installment loans are probably the most easily recognizable type of loan that you can get as a business owner. These loans can be written for all types of different purposes. You will receive the full loan amount once the loan has been signed. Then you interest will be calculated based on the full term of your loan. If you pay your loan off ahead of time there will be no penalty or readjustment of of interest. Read more.
3. Balloon Loans
Though these loans go by many names you can recognize these loans easily by how they are structured. These loans are similar to installment loans except for one crucial factor. When paying this loan you will not be required to pay any of the interest on the loan until your final payment. These loans are specially useful when you know that a client is not scheduled to pay you until a specific date.
4. Interim Loans
When pursuing an interim loan bankers will be even more scrupulous in their research as they will have to ensure that the commitment is reliable. These loans are generally used to pay workers for their labor whereas the finished project, usually a building’s mortgage, will be used to pay off the loan.
5.Secured and Unsecured Loans
If you have a long history working with a particular bank they may feel comfortable enough with you or your business to offer you a unsecured loan. Meaning that the loan has no collateral secured as a secondary source of payment should you not b able to pay your loan off. A secured loan on the other hand is exactly the opposite of that. The bank will require that you offer something of relative value to your loan amount, usually about 75%, as collateral should you default on your loan.
6. Letter of Credit
Normally used in international trade, this allows you to guarantee payment to suppliers in other countries. The document replaces the entrepreneurs credit with the bank’s for a certain amount of time.
Banks all over write loans under a ton of different names. Ultimately they are all one of these types of loans with one specific variable locked in.
Those were some examples of loans that are available to you as a business owner. From installment loans to balloon loans. Hopefully this has introduced you to a type of loan that is perfect for you and your needs! For more information visit: https://www.aspirebusinessloans.co.uk/blog/going-green