Benefits of Obtaining a Small Loan

Now that we have discussed a few benefits of obtaining a cash flow loan, it is time to compare the different places one can get a loan.

One option is to head over to your local bank branch and sit down with a specialist to discuss the size of the loan, payback period, and what the interest rate will be. Siding with a bank can be a good option because they will not take any ownership of the business. As stated earlier, banks just want their money back and collect some profit from the interest they charge. Also, banks typically offer loans at a lower interest rate, than say, a venture capitalist or other independent loan company.

The Small Business Administration(SBA) is known for offering small business loans for a relatively low-interest rate. They often accept the newly established businesses that do not have enough credit history to prove their effectiveness and paying borrowed money back on time. The loans are meant to be long-term. It is not uncommon for small business owners that borrowed money from the Small Business Administration for ten years or more. The stack of paperwork to apply for a loan from the SBA is intense but worth the shot if other companies are not willing to work with your business.

Do you know the difference between a personal credit card and a business credit card? Did you even now there is more than one type of credit card? A lot of business owners think it is in their best interest to pick up a business credit card because, well, it is strictly for business owners (hence the name). It turns out that a personal credit card is the better of the two, even when used to make business purchases. The personal credit cards have consumer protection, while business credit cards do not.

Small business loans can be taken from savings accounts. If you have money just sitting in personal savings accounts not earning much interest or have a friend or family member with a lot of money in their savings account it may be worth it to make a deal with them. Both parties would have the freedom to set their own terms and when the money needs to be paid back. A deal can be started instantly and with this method, you can trust the person loaning out the money because they should be someone you know well.