There are several reasons as to why many låne penger på minuttet, from funding an emergency expense, for home repairs or renovations, to funding a trip, or even for shopping. Whatever the reason may be, these small loans could very much help in augmenting your finances. Such small loans wherein people are able to låne penger på minuttet or borrow money by the minute have become widespread because of the convenience of easily being granted one and where pay out only takes a few minutes as well.
While small loans may be easily obtained from lenders and financial institutions, these types of loans don’t require any security or collateral, a certain item of value. Since the lenders are more at risk, the interest rates are usually higher than secured loans or loans that require collateral. Nonetheless, provided that you know how to manage your finances and payments well, these small loans provide you the opportunity to spend the loan you got for almost anything you want. But, in terms of business purposes, you may need to borrow more.
When starting a business, expanding a business, or perhaps require funds to correct some concerns on your cash flow, consider taking out a business loan as the amount you could loan is much bigger which you could maximize to ensure your business operations run smoothly and that your business plans are carried out for more potential revenue.
Kinds of Business Loans
There are various kinds of business loans that many financial institutions and lending institutions offer. Similar to small loans, some business loans are unsecured whereas some are secured. This means that the borrower pledges a collateral or an asset against the debt. This could be in the form of stocks, company vehicles, or business equipment. If the loan isn’t settled, the lender may repossess or claim the pledged collateral or asset.
To give you an idea of the different loans used for businesses purposes, let’s have a look at some of the major kinds of business loans.
Small Business Administration Loans (SBA Loans)
The Small Business Administration of the US partly backs loans from $5,000 to $5 million in order to aid small businesses, but commercial banks and online lenders actually provide the loans. As the government backs these loans, the APR rates are lower and where the repayments are longer as the lenders have more assurance and confidence that the money lend will be returned. SBA loans could be utilized for just about any business purpose, however the process of applying for one is long and laborious.
Business Term Loan
This is a traditional form of business loan wherein you could loan a lump sum amounting from $1,000 to $500,000 and pay it back over next years. The terms for repayments are typically between 12 months to 60 months (1 year to 5 years), though there are lenders offering terms that are longer and shorter. Business term loans are unsecured and could be used for any business purposes. But since it is unsecured, lenders look at the credit score of your business, your average monthly or annual returns, as well as your overall financial health.
Business Line of Credit
These loans are similar to a credit card but with lesser credit ratings. A maximum amount of credit could be granted which you could use at any time you need. As soon as you have paid back the money you could take out more wherein you only pay the interest on the borrowed money. Funding time is however short as many businesses get approved in a day. Terms for repayment are typically from 6 months to 12 months, however the terms will depend on the credit score and revenue of your business.
While business loans could be utilized to buy equipment for your business, an equipment financing loan make use of the equipment you purchase as a collateral for the said loan. Because of this, a business with poor credit ratings may apply for this kind of loan. While still in the process of repaying the loan, you could already make use of the equipment you have purchase. The amount of the loans will depend on the cost of the equipment and the repayment terms are usually around 60 months or 5 years.