Once you have a small business, and you start looking for business loans, you know what happens. The moment you start to enquire online you’ll be bombarded by emails about all kinds of loans. They come in so many shapes and sizes that you’re bound to be confused. Here we’ll give you a brief synopsis of what you may be offered and what some of the most common small business loans are. We’ll also offer a bit of an evaluation in comparison for the top loans business owners will tend to choose. One of which is equipment financing.
The Elusive Bank Loan
Bank loans have traditionally been the top lending resource for small businesses. This is because most people, though well-versed on business formation, are not that well-versed on the loan solutions available to them. With a bank loan, it’s a process that can be intimidating at the very least, and at the very worst, pretty hard to get. Because small business owners and startup entrepreneurs go for the bank load first, they may become discouraged and wrongfully exit their dream plan. This is a sad and unfortunate experience that doesn’t have to happen.
Why does this happen?
The bank loan is a difficult loan to qualify for and we’ll tell you truthfully that they don’t typically even look at a company that is under a sole proprietorship or one that can’t show at least 2 years worth of profit and loss reports. But, there are other solutions for these businesses like equipment financing or MCA (merchant cash advances). There’s nothing to fear about these alternative loans. They’re the product of a creative economy born from the economic downturn we have experienced. These are viable solutions that are available and will lend the business owner flexible business solutions.
What are equipment financing and MCA loans?
Equipment financing is a simple loan that is given against the value of your equipment. The company may purchase your equipment and one simply buys it back. There’s a program for everyone.
Cash advance loans:
The MCA loan which is a merchant cash advance is one of the best and safest loans. The reason is its flexibility in repayment and you are repaying it as you go like a credit card because a cash advance is like that exactly; you pay by surrendering an agreed upon amount of your future profits.
So, how do you choose a loan? It’s easier than you think. The loan you choose should be based on the age of your company as fledglings rarely get anything. But if you have a new or well-established business, a MCA line of credit is the obvious choice. Why? The flexibility can’t be beaten. At the end of the loan duration, you won’t have a bill looming over your head. You will have already paid as you go from profits. The first thing to do is to talk to a loan officer about the equipment financing and MCA to determine what’s best for you.