Small Business Loans

Written by Jill Morrison
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To achieve success, entrepreneurs may consider a variety of small business loans. Lenders provide expert advice to help ensure that the correct choices are selected by each business. Some of the options available are SBA loans, working capital loans, debt restructuring, and lines of credit. Lending companies offer valuable services aimed at assuring success for small business owners.

Types of Small Business Loans

Working capital loans are common. They may be used for almost any purpose. Some examples are for payroll, purchase of equipment, expansion of business, or personal needs. Lending terms are outlined in advance, including interest rates and re-payment schedule. Special loan options are available for nationally recognized franchises and for exporters of U.S. goods and services.

SBA 7(A) loans are popular for small business loans. These are obtained through private lenders but they are guaranteed by the Small Business Administration. Several requirements must be met to qualify for the loans. Wholesale business with less that 100 employees and manufacturers with less than 500 employees are eligible. The borrower must be actively involved in the business and have no past bankruptcies or felony arrests. The advantages include longer terms and no points or balloon payments.

Some lenders offer small business loans such as capital leases for equipment. These are treated as an installment purchase and are considered to be a loan. The lease must meet certain requirements. Two examples are a lease that automatically transfers title at the end of the term and a lease with a term greater than 75 percent of the estimated life of the equipment.

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