Small Business Loans
Understanding Small Business Loans
The term “small business loans” is used to broadly define a group of loans and financial products a lender might provide to a small business or entrepreneurs.
It encompasses products like business lines of credit, SBA loans, short term loans, business term loans, merchant cash advances, equipment financing, commercial mortgages, Accounts Receivable financing, startup loans, business acquisition loans, and small business credit cards.
Getting a small business loan
Startup loans, a notable exception to this rule, are based on the personal credit history of the business owner.
Typically, small business loan decisions rely on a business’s creditworthiness, which is determined by a mix of factors including credit score, revenue, and time in business.
Secured vs. unsecured business loans
The difference between unsecured and secured loans comes down to one thing: collateral. Secured loans are backed by collateral where unsecured loans are not. Understanding the pros and cons of each can help you narrow down which small business loan type is right for you.