Types of Business Loans
Business loans are the types of credit used to start a business or expand an existing one. There are several types of business loans – so this is just an introduction to your alternatives. If you’re looking for a loan to start or expand your business, you may find that the best option isn’t necessarily a typical business loan at all. If you’re a homeowner with available home equity, a sensible source for your business loan might be …YOU.
Business loans from banks
Business loans from your banker can come in different types:
- SBA business loans are government loans. Like other types of government loans, these business loans are insured against default by the government, but underwritten and funded by the lender. That can make them the most affordable business loan—but one of the most time-consuming and paper-intensive as well. Plus, Uncle Sam looks to your assets, not the government’s, as collateral on an SBA business loan.
- Other common business loans
- Working capital business loans: Proceeds will pay operating expenses.
- Fixed-asset acquisition loans: Proceeds from this business loan are generally used to buy equipment, vehicles and other tangible assets.
Applying for a business loan
The process of applying for a business loan can usually require the following:
- A detailed business plan, including 3 years’ financial projections.
- 3 years’ financial history.
- Solid credit history and banking relationships.
“Business” loans from your home equity
Such loans can actually go by another name entirely: home equity loans. Depending on your situation, a home mortgage alternative may be less costly and much less work than a typical business loan.
Home equity loan options can include:
- Cash-out refinance loans
- Home equity loans
- Home equity lines of credit (HELOC )
Thinking of tapping into your home equity for business expansion? Want to start your own business and be your own boss? Call our home loan experts for a FREE, no obligation consultation at 1-888-284-7596.
