As the market changes, or new business opportunities surface, your business lending needs will likely shift. Whether you’re looking to grow or need financing to help cover current costs, it’s important to take time to find the solution that works for you and your business today, tomorrow and beyond.
So, what business loan is right for you? Here are five loans that can be used to take your business to the next level.
Business line of credit
With a line of credit, you can fund short-term business expenses quickly and easily. This flexible, revolving option allows you to borrow, repay and re-borrow the amount you need, when you need it.
Depending on the amount, a line of credit can be offered as unsecured or secured debt. For smaller lines of credit, the debt will likely be unsecured, which means you can access the funds without collateral. Secured lines of credit are typically those with limits higher than $100,000, which require collateral like real estate, bank accounts and investments.
When sourcing a lender, consider one who’s business line of credit includes an automated payment option, and terms and rates tailored to your unique business needs.
Equipment loans
The right equipment can help your business operate efficiently and successfully. As you research the right equipment purchase for your business, you’ll work with your lender to review a variety of payment terms and down payment options, and select the best loan for your business.
Equipment is not limited to heavy machinery; it includes anything from a work van to furniture. Additionally, you may qualify for 100% of the cost of the equipment, making equipment loans a convenient option for small businesses who may need the entire cost covered due to budget constraints.
The term of the loan is also dependent on the estimated life of the equipment, which means you’ll have a longer period to pay the loan off if the equipment will have use for years to come.
Small Business Administration (SBA) loans
SBA-certified lenders offer several SBA programs with a streamlined underwriting process and broad qualifying business purpose. These loans can offer longer terms, with rates tailored to your small business needs. They can allow you to expand and grow with equipment purchasing, real estate, international services and other business expenses.
To qualify for an SBA loan‡, your business must be for-profit, physically located in the United States, and the business owner must have invested their own time or money into the business. Ask your lender for the full list of eligibility requirements to determine if you qualify.
Term loans
If you want to closely manage your monthly expenses, a term loan can help you stretch out payments for a longer timeframe than traditional business loans. You may also benefit from the predictable, consistent amortization schedule that can help with expense management.
This type of financing is structured to match the life of the collateral or asset purchases, like machinery and equipment, vehicles and trucks or furniture and fixtures. Term loans typically have lower interest rates due to the longer duration of the loan.
Real estate loans
Whether you’re developing, renovating or purchasing property, there are a variety of real estate loans available to meet your needs. Your lender will review your whole financial picture to anticipate how a real estate purchase can influence your bottom line, and structure a deal that works for your timeline, liquidity and goals.
Developers can also benefit from real estate loans by utilizing them for construction only projects, construction or permanent financing, bridge financing and large-scale property renovations. This loan is a great option for real estate investors as this it can be used to finance the purchase of an investment property, refinance into a new loan to meet current needs, renovate an investment property or consolidate multiple investment properties into one loan.
Whether you’re an experienced business owner or an emerging entrepreneur, it’s important to understand the variety of business lending options available for your business.
If you are interested in learning more about how UMB can help your business as a financial partner, visit our website.
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