Understanding Different Types of Small Business Loans

May 19, 2019

Understanding Different Types of Small Business Loans

There are many different kinds of small business loans, making it essential to do your research before beginning any application process. Rushing the process is akin to walking into a paint store and telling the clerk you need a can of paint, any kind will do. You’d end up driving home with a new can of paint, but it’s unlikely you’d get the one needed for your specific job. To increase your odds of success, you would have to identify the paint’s color, sheen, and whether it’s indoor or outdoor.

“Getting a business loan sounds simple — until you realize how many types of loans exist and how many lenders offer those loans,” says business.org. “Suddenly, you find yourself overwhelmed by choices that you didn’t even know existed.”

The best place to start is by identifying what your specific use will be for the loan. If your objective for the money isn’t clear, it’s safe to say you have work to do before knocking on a lender’s door. Create a solid plan, and then determine the specific amount of money needed to make it happen. Also consider how long you would like to have to pay the money back.

The 11 most popular types of small business loans

The following information covers the common routes entrepreneurs take to get the capital they need. Pay attention to the dollar amounts, rates, terms, and other elements, as they’re like the product details in the paint store that will help you choose the small business loan type that’s perfectly suited for your business needs.

About the Author

Grant Olsen

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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