Have you ever been turned down for a loan or credit card? It might not be your fault. There’re numerous credit types, and each is designed for a specific purpose. How do you determine which type suits you? This blog lays it out.
1) Term Loans –
A term loan is a loan type repaid over a set interval. This loan type is ideal for businesses looking to finance a large purchase or expansion. The monthly payments of such loans are usually fixed, and they come with interest on top of the balance.
2) Business Lines of Credit –
A business line of credit is a loan type that allows businesses to borrow money as required. The amount you borrow varies based on the credit limit set by the lender. Businesses unsure of the exact amount they need to withdraw usually sign up for a line of credit.
3) Micro Loans –
Microloans are small loans typically given to entrepreneurs and small businesses. These loans help businesses grow and expand. You can use a microloan to finance various business decisions such as inventory supply, working capital, or salary disbursement.
4) Merchant Cash Advance –
A merchant cash advance is a cash loan given to businesses in exchange for a percentage of their future credit card sales. This type of loan is ideal for businesses that accept credit cards. The lender gets paid back through automatic deductions from the business’ credit card sales.
5) Equipment Loans –
An equipment or inventory loan helps finance the purchase of business equipment. This loan type usually comes with a lower interest rate and longer repayment term than other loans. However, businesses must exclusively use the equipment purchased for business purposes.
6) Franchise Loans –
Franchise loans help you pay the upfront fee required to become a franchise owner. These loans come with various repayment options, and the interest rates are usually lower than other types of business loans.
7) Commercial Real Estate Loans –
You can finance property or purchase or remodel using a commercial real estate loan. Commercial real estate loans offer a fixed interest rate and a repayment schedule spread out over several years. They work like a mortgage, and failure to repay them may lead to foreclosure.
8) Long-Term Business Loans –
If you’re looking for a loan that will cover a long-term expense, consider a long-term business loan. However, these business loans are difficult to secure because they require intense scrutiny, and not everyone’s eligible for them. Businesses in operation for a considerable time and with a solid financial history are usually considered eligible for this loan.
If you’re looking to finance business growth, Trifecta Credit Solutions can help. We offer diverse credit services that suit businesses ‘ needs, and our team is dedicated to helping businesses in Harrisburg and the surrounding area get the funding they need to succeed. Get a free consultation from our team today.