As a business owner, where you set up shop and operate is an intensely important decision. More importantly, even if you already have a brick and mortar location for your business, you may need to purchase equipment, make repairs or renovate your establishment. Regardless of what you’re trying to do, you will need to have the funds to take action. Fortunately, there are many options and loans designed for these express purposes. However, you will need to do your homework to determine what type of loan would be best suited to meet your business needs.
SBA loans can be particularly beneficial to business owners. Although the application process can be lengthy, the interest rates are usually favorable and the terms are usually complimentary for business owners. Furthermore, business owners can take advantage of various types of SBA loans that may meet their needs. Although credit score isn’t always the most stringent factor when it comes to approval, a credit score of at least 680 is usually preferable. A higher credit score will usually help your approval odds and your interest rate. Business owners keep in mind that these loans aren’t designed to completely fund a business purchase. These loans found anywhere from forty to eighty percent of the purchase, and the rest must be funded by the business owner and another lender.
Traditional Commercial Loans
Traditional commercial loans or bank loans work much like residential mortgages. However, they are much more difficult to acquire because they’re not backed by the government like many residential mortgage loans are. However, although the process can be lengthy, the terms and interest rate can be favorable, and the repayment process can be as long as thirty years.
Commercial Bridge Loans
As discussed above, both SBA loans and traditional commercial loans can take quite some time to acquire. The application and approval process can take weeks or even months. Business owners who need to make a movie on a commercial property quickly may benefit from a commercial bridge loan because the qualifying process is much quicker. This type of business loan allows business owners to make moves quickly to acquire commercial real estate or other time-sensitive business acquisitions. The interest rates can be affordable as well. However, business owners should understand that these loans are for short-term purposes and the entire loan is often due as early as six months or a year later.
As a business owner, you must consider everything about your business and your credit before deciding on the best loan for you. Often, it helps to talk to a loan officer or a business consultant before making a decision on a loan. It’s best to know all the ins and outs of a loan before you sign on the dotted line.