Banks, credit unions, non-bank lenders, and governments offer small business loans. Borrowers can choose from different financial solutions such as commercial and business term loans, cash flow finance, business loans and lines of credit, and others.

Alternative Arrangements

Business owners are also offered credit cards, lines of credit, equipment financing, equipment sale-lease backs, and other financing solutions. New business owners can choose from bank and buyer financing. Business acquisition loans help companies to purchase existing businesses.

Types of Financing

Applicants for business funding can choose from disaster and real estate loans, micro-loans, and others. In addition to loans under government programs, credit unions and big and small banks offer different financial solutions. Secured and unsecured loans differ when it comes to interest rates, repayment periods, and collateral. Financial institutions accept different assets as collateral, including real estate and natural reserves. A good credit score is the main requirement for an unsecured loan. Businesses are offered land and subdivision development, equipment and vehicle, and other loans. Traditional lenders such as brick-and-mortar banks usually offer debt financing. Banks also provide real estate loans to construct or purchase industrial, retail, and apartment buildings. Financial institutions also offer permanent and owner-occupied financing. Lenders also provide micro-loans to businesses that are looking for funds to expand or start an enterprise. Businesses can use the funds to buy equipment, fixtures, furniture, and supplies. The loan cannot be used to buy real estate holdings and land. Funding is also available in the form of short-term loans with a borrowing limit of up to $35,000. In general, the funds can go toward expansion, operation, and acquisition.

How to Apply

Banks require documents such as licenses and business certificates, loan application forms, and others. Business owners must submit documents such as financial statements, bank statements, business plans, resumes, and income tax returns. Most financial institutions require that borrowers present their personal and business financial statements, along with their cash flow projections and income statements. Bring your cash flow statements, corporate resolution, and proof of non-business income. If you are applying together with a cosigner, you need to present recent paystubs. Legal documents to submit include commercial leases, franchise agreements, and others. Some banks also require that applicants submit copies of contracts and business registrations. You may want to explain whether you will use the funds for business expansion, product development, or your current near term expenses.