Perhaps you need a short-term loan to increase your inventory to serve the influx of new customers you just received or you’d like to expand to a new market and need cash to make it happen. Whatever the reason, it’s time for a small business loan. Below are several lending options for you to consider.
Traditional Bank Loan
Requirements vary, but traditional loans are usually credit-based and will require you to pay interest. Loans are typically targeted to businesses that need up to $500,000 and can have terms up to 84 months. With the financial crisis that’s happened over the last few years, many banks are reluctant to lend even with an airtight business plan.
Friends and Family
If you’re looking to borrow up to $25,000 and have a willing circle, this may be a great route for you. It is often the first stop for business owners looking for funding. Depending on your friends and family members, criteria may be as simple as your character and your stellar business expansion idea. Though you know these lenders personally, it is best to get all agreements in writing. Unpaid loans can make tense holiday dinner conversation.
Another loan option is through an online lender, such as IOUCentral. These companies still have requirements, but they usually cater to those small business owners who may just miss bank criteria or do not have access to other sources of capital. IOU Central is unique in that it even offers funding for e-commerce businesses, a market that isn’t always taken into account with traditional lenders. A non-traditional option like this may be ideal if you’re looking for help with inventory, equipment, expansion or cash flow. Make sure to look over all terms before signing a deal to ensure you not only meet the requirements but can also keep up with the payment schedule.
Regardless of which method you choose make sure to get a few things in order first, such as credit history, cash flow history and projections, available collateral, and other financial statements.