Every business has its challenges, and one of them from time to time is coming up with the capital you need to push forward. Business loans are an option to help your business grow, make your mark in new areas, boost sales and marketing, expand your team, buy equipment, and more. While traditional lending options like banks are one option, many business owners prefer working with nontraditional lenders for more flexibility, better terms, and the easier application process. So how does a business loan work? First, it depends on what your business needs.

There are a few different types of loan products available from a business lender such as SMB Compass. In order to determine which will work best for you, you should first speak with an advisor who can guide you in the right direction. A quick chat can help your advisor understand your business and let you know whether a line of credit, equipment financing, a multi year term loan, an SBA loan, or another product might be your best option.

Line of Credit

With a line of credit, you have a great deal of flexibility as you can access the money you need as you need it. Your lender gives you a capped amount and you can use any amount up to that maximum. It’s good for any expenses that pop up unexpectedly. There is a typically a fee to set up the line of credit, but then there is no interest unless you actually use the money.

Equipment Financing

Should you need to purchase any type of equipment such as construction equipment, manufacturing, vehicles, or even office equipment, a financing loan might be a consideration. There are a few ways equipment financing can work. For instance, you could put a down payment down, and have the loan be secured by the value of the equipment. You can also use equipment financing for leasing.

SBA Loans

An SBA loan is backed by the United States Small Business Administration and it offers a low-interest rate. With good repayment terms, it’s an attractive option for many business owners. However, the application process can sometimes be tedious. SMB Compass works with clients to make the application as quick and seamless as possible. The time it takes you now to apply can make a huge difference for your business for years to come.

Multi-Year Term Loan

When you need about 2-5 years to repay a loan, a multi-year term loan may fit. This type of loan has lower monthly payments so it amortizes over a few years. It gives you solid funds over time for your daily needs.

Depending on the product your advisor thinks will work best for you, next you will do the online application. The application is quick and easy to fill out, but be prepared to share possible financial details such as personal and trade credit reports, cash flow, sales history and trends, and bank statements. Keep in mind that each product requires varying amounts of these materials with some not even requiring a credit check. Even still, we work to approve loans quickly, usually within 24 to 48 hours.

Once you receive approval for your loan, we’ll make the deposit (often within 48 hours as well) so you can get back to running your business. SMB Compass has backed over $160,000,000 to over 1,100 businesses. Ready to be next? Get in touch with one of our advisors today so we can start becoming a true partner in your business.