Your business should be an ever-expanding venture. But only 53% of small businesses said they planned to grow in the year 2018. Why are so many businesses either stale or even failing?
The answer to that is most likely multifactorial. But the number one factor is fear. Fear of failure, fear of trying new things, and fear of taking risks.
One of those risks includes taking out a loan to expand their business. You might have taken out a loan when you started your business. It’s common and acceptable to do this. But taking out a loan to expand your business? This is an oft-overlooked strategy.
If you’re thinking of taking out a commercial loan for your business, you’re probably wondering what loans are at your disposal. Here are the best ones for small businesses.
1. Short-Term Loans
Often called bridge loans, these loans are high interest. But they are only meant to be taken out for a short amount of time, hence “short-term.”
The advantage of these loans is the timeliness. You don’t have to go through a lengthy process to apply for these loans. But you must be sure you’re going to pay them back in a matter of months.
2. Equipment Loans
If you’re a small business that uses construction equipment or expensive baking machinery, you might want to consider an equipment loan. The loan amount is relative to the price of the equipment you’re purchasing. And the loan repayment timeline is based on the useful lifespan of the equipment.
Be sure to make your payments or the lender could seize the equipment.
3. A Business Line of Credit
This is the most flexible option. It’s like having a credit card for your business.
You can use as much or as little of the approved amount as you like. And the amount can be as large as one million dollars.
Just like a credit card, you only pay interest on what you pull out. The rest is just “reserve” credit.
This is the best option for those who are uncertain about their capital requirements but might need a lot of money at some point.