Small Business Loan Types – What Are the Basics?

commercial installment loans

Typically, the best rates are on a business loan through a bank which provides commercial installment loans. But there are also individual loans specifically designed for certain purposes, like equipment financing or small business financing. Understanding how these loans work and which type is best for you will help you make the right choice when it comes to applying. Here’s a look at commercial lending terms and the advantages and disadvantages of each.

Commercial invoice financing. When it comes to small business loans, one of the most common types is commercial invoice financing. This includes equipment leasing and lease payments, but also often includes regular business cash advances. It’s best to work with a reputable company that can explain the advantages and drawbacks of this option.

Commercial Cash Flow

Starleen Bank offers two types of commercial loans, Starleen Business Funding and Starleen Commercial Cash Flow. The former is a secured loan and uses your business’s balance as collateral. In exchange, the bank guarantees payment of a specified amount based on certain terms. You may need to provide security for your loan and may have to provide monthly reports detailing your cash flow. This is not a good choice for large businesses since you may need a substantial amount of funds to cover unexpected expenses.

Commercial Cash Flow provides similar benefits and is somewhat more flexible than Starleen Business Funding since you are not required to provide collateral. The lender uses your business’s balance against future credit card payments and similar expenditures in order to secure the loan. If you do qualify, however, this type of loan also has some drawbacks. First, you are required to submit quarterly reports detailing your cash flow, which may require you to spend time in collection or with a processor.

Another alternative for financing is a short-term loan

Short-term financing is an unsecured form of funding. These loans typically last one to four weeks and may be renewed if the business meets the terms of the renewal. Many business owners find that these short-term funding solutions are extremely effective because they do not involve the high fees and interest rates associated with standard financing options. Typically, these funding programs are offered by private investors or by some lending institutions, such as banks.

Business loans also include corporate loans and refinancing options. Corporate loans are provided at much lower interest rates than individual loans. If you choose to finance a project through a corporate loan, your business may be able to borrow money at considerably lower interest rates than it could get a small-business loan. Refinancing is also an option for many small-business loans, since it allows you to lock in very low interest rates and pay a minimal upfront fee.

Leave a Comment

Your email address will not be published. Required fields are marked *