Running a small business is not easy.
When you start a small business there are always going to be problems that small business owners face in operating the business, the most common being raising capital. Raising capital for your small business is stressful especially in conditions where small business owner’s status is treated in a similar way to borrowers with poor credit. This is because of the unstable income generated from the small businesses and this makes banks and financial institutions reluctant to yield to demands of small business owners. However there are small business loans particularly designed with business owners in mind. The loan was devised by lenders who understod the struggles that small business owners face, and built to help small businesses grow and thrive.
Whats the difference?
Small business loans are advanced to small scale entrepreneurs who require capital for purposes such as purchasing tools and equipments for business,expansion of business facilities,buying raw materials and paying wages to workers or buying improved technology for business.Borrowers can repay the loan in installments agreed upon by the bank or financial institutions depending on the income they are able to raise in a that period.Small business loans that have a flexible repayment schedule can be the best solution for the self employed people and small business owners.A flexible repayment schedule means that payments are not necessarily made after the the specified period of time.There can be underpayments,over-payments or no payments made at all often referred to as payment holiday.
Small business loans are available in three forms:
Short term loans
intermediate loans
and long term loans.
Short term loans offer funding to new businesses, and can offer loans to businesses with low credit scores. Short term loans help solve financial problems for an immediate business solution, and a quick payback. Their term can range from 3 to 12 monthh.Intermediate loans are designed more for large financial expenses with a loan term of 1 to 3 years.Long term loans supply the initial cost required to set up a business and is repaid after the business is running smoothly.They have a loan term that extends from three to seven years while some can go for about twenty five years.Depending on ones requirements,small business loans repayment terms can be agreed upon between the lender and borrower.
While small business loans offer excellent benefits for small businesses they have drawbacks as well.
They include:
The usual requirement of collateral.
Hidden clauses and fee’s.
A long application and approval process.
Stacks of paperwork.
Very steep qualifications, high credit score, and business performance.
The solution?
Online Capital set out to improve on the small business loan process, striving to make capital more accessible and easier for business owners to acquire. We keep our requirements, and process transparent at all times, and provide experienced staff to assist you along the way. Whenever your business meets a financial bottleneck or you are in need of extra finances to run or expand your business don’t let small business loans scare you, it may be exactly what your business needs.