26 / 05 / 2021

Everything you need to know about company loans

Loans for small businesses can be helpful in starting up or expanding an existing business. Also, during a coronavirus pandemic, funding of businesses can aid your company in staying afloat in the face of a disaster. Loan programmes provided by direct lending and the Small Business Administration, including the SBA Paycheck Protection Program, can set in motion working capital loans and other financial support when you need it most, especially if you don't know how to find an investor or business partner. Continue reading to find out about funding opportunities for small business owners, including the SBA Paycheck Protection Programme, working capital loans and property loans. Discover how business loans work and how you can find the best loan to start, expand or maintain your start up or brand.

What are small business loans?

Loans for small businesses are intended for use for business expenditures. Some loans are used for general financing of business activities, others are used for specific purposes, such as working capital loans, real estate loans or equipment financing.

What types of small business loans exist?

Real estate loans. A commercial mortgage is a fixed-term loan for the purchase, management or refurbishment of commercial property, such as a warehouse, multi-functional building or retail centre.

Financing of invoices. If your company is struggling financially due to the fact that you are waiting for your invoices to be settled, you can benefit from invoice financing, also known as factoring. Through factoring, you sell your unpaid invoices to a lender with a discounts.

Business credit lines. Business lines of credit may be used to purchase stock or equipment, invest in marketing, or manage seasonal sales fluctuations. They have a maximum limit that can be borrowed and repaid. Interest shall be charged on the amount you withdraw and not on the maximum limit.

How do SBA credits work?

The Small Business Administration, which is a government agency providing immediate loans, loan guarantees and other means of support for small entrepreneurs . Loans provided by the Small Business Administration are carried out by commercial lenders who are approved by the SBA.

What types of small SBA loans exist?

Loans for equipment and real estate. Loan programme 504 from the Small Business Administration offers companies long-term financing at a fixed interest rate for their main assets. The maximum amount of the SBA 504 loan is USD 5.5 million, and these loans are available with a 10- or 20-year period of repayment.

Microloan programme. Start-up or growing small businesses can obtain loans of up to USD 50,000. These loans may be utilized either for working capital or to purchase inventories, equipment, furniture, or machinery.

Loans in the event of a natural disaster. Low-interest loans are offered directly from SBA and can be used to recoup funds after the declared disaster. Companies can use these loans to pay for the costs of repairing or replacement of real estate, machinery and equipment as well as inventories and other assets.

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