Loan Options For Small Business Entrepreneurs

When looking into financing a startup business or an already established business, whether small or big, applying for business loans from lending companies, banks, or cooperatives such as the koperasi ukhwah is often the most simplest and convenient way to acquire this funding since it can take only a few days once your loan is approved by the lender.

However, before getting a business loan, it would be best to first find out a few of the most common types of business loans you can get from banks, cooperatives, or private lending companies and understand which business loan is right for you.

  • TERM LOANS are best for those who are in need of financing for a short-term or long-term basis. It is paid on a regular basis on a set period of time. The term of payment would take 1 to 10 years depending on the amount borrowed at 6% to 30% interest rate. Loanable amount ranges from $10,000 to $500,000 to $1,000,000.
  • BUSINESS LINES OF CREDIT LOANS are usually used for a business’ daily operations like salary, supplies needed for the business, utility fees, or for any cash flow gaps. Loanable amount is from $5,000 to $1,000,000. Term of payment is 6 months to 10 years with 1% to 30% interest rate.
  • SBA or SMALL BUSINESS ADMINISTRATION LOANS are usually applied for by small business owners, whether starting or established, who are in need of finances for expansion of their business. Loanable amount ranges from $5,000 to $5,000,000. Payment term is 5 to 25 years with 6% to 13% interest.
  • EQUIPMENT AND CONSTRUCTION FINANCING is best for business owners who are in need of financing for construction or renovation of existing business establishment or for purchasing vehicles, computers, or any equipment that is needed for the business. Payment term is 1 to 5 years with 6% to 30% interest rate. The loanable amount ranges from $5,000 to $1,000,000 or 100% of the value of the equipment.
  • MERCHANT CASH ADVANCE is a swift and easy way to get a loan without any need for collateral or credit score comparing it to other types of loans. However, it is one of the most costly options when getting a loan in terms of the Annual Percentage Rate or APR. Loanable amount is from $2,500 to $500,000. Payment term is 1 to 36 weeks on a daily basis through your merchant account with a factor rate of 1.1 to 1.5.