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Business

Best Financing Options for Small Businesses in 2018

If you own a small business and need financing because you are just getting started or have fallen on hard times, you will need to know what your options are. These days there are so many different routes to take when it comes to getting financing for your small business that you will definitely want to make a point of getting as much information as possible on each one. The more research you do into your financing options, the better off you and your business will be for it.

Short-Term Loans

Short-term loans typically come with a payback period of anywhere from 3 to 18 months, and they can be a great option for lots of small business owners. If you have any emergency expenses related to your business that you need to cover right away, a short-term loan is worth looking into. The loan amounts are typically smaller because there is less time to repay the money you borrow. Some of these loans can come with fairly steep interest rates, but it depends on what your credit is like.

SBA Loans

The Small Business Administration is a section of the government that assists small businesses with getting loans for larger amounts than they would normally qualify for. This agency gives a small part of the loans to lenders as an incentive for them to approve small businesses that are in need. You will find that SBA loans are quite similar to traditional bank loans in that you can borrow fairly high amounts. If you need a lot of money for your business, this is certainly a viable option look into.

Business Lines of Credit

A business line of credit works in much the same way that a credit card does. You will be given a certain limit that you can borrow up to, and you’ll have to pay back whatever you spend by a certain date. The good thing about this option is that you’ll only be required to pay interest on the money you spend. Business lines of credit are known for having relatively low rates, which can save you quite a bit of money.

Business Credit Cards

There are also business credit cards, which can provide you with the money you need right away. These credit cards don’t have very strict requirements or standards for those who are applying, so there is a good chance that you can get one. When you have one of these credit cards, you will have a much easier time separating your personal and business-related finances. Most of these cards also offer lots of different rewards that you can earn by simply borrowing money.

Equipment Financing

Another option that you will have when it comes to getting money for your small business is equipment financing. This type of lending doesn’t focus on the borrower’s credit history, which can be a great thing if you have a less-than-perfect score. Those who give out these loans rely on the overall value of the equipment or property that you are acquiring.

If you are unable to keep making payments on the loan you get, the equipment you have purchased is seized by the lender. You can look at equipment financing as a sort of auto loan, because that is essentially what it is. It is important that you are completely sure that you can pay off the loan in full before you apply for it. The last thing you want is a huge red mark on your credit report in the event that you default on the loan.

Final Thoughts

Sometimes it is necessary to obtain financing for your small business, and you will need to know your borrowing options before making a final decision. The more you learn about what your choices are, the more money and aggravation you will save yourself in the long term. You don’t want to rush into getting a loan of any kind, because you will likely end up regretting it. If you want to get the best deal on a loan for your business, make sure to thoroughly research lenders and compare interest rates. You will definitely be glad you did your homework.

Personal Loans

7 Mistakes to Avoid When Shopping for a Personal Loan

There are lots of mistakes that people tend to make when taking out a personal loan, and it’s important that you know about all of them so you don’t get yourself into trouble. Seemingly simple mistakes can have pretty serious consequences, so you will need to make sure that you educate yourself on this subject as much as possible. A personal loan can be of great help to a lot of people, but there are going to be certain things you will want to avoid doing.

1. Borrowing Money You Don’t Really Need

One of the worst financial mistakes you can make is taking out a loan when you really don’t need one. You should spend some time thinking about whether or not you really need a loan so that you don’t wind up with unnecessary debt. A personal loan shouldn’t be taken out for frivolous purchases. You could save yourself a lot of aggravation later on by simply considering this before applying for a loan.

2. Not Doing Your Homework

A lot of people who take out personal loans tend to settle for the first lender they come across, but you will need to spend some time doing your homework. It is imperative that you look closely at different lenders so you can choose the right one to borrow from. This is certainly not something that you want to rush into, because you will inevitably regret it. By doing this research, you will get the best rate on your loan.

3. Not Paying Attention to the Fine Print

You should always look at the entire contract you are required to sign to get your loan so that you know just what it says. Reading the fine print in the contract can really help you out when it comes to not spending more money than you have to. Some unscrupulous lenders put all sorts of additional fees in the contract, so you will need to make sure that isn’t the case.

4. Neglecting your Credit Score

Make sure that you take a close look at your credit report and score so you can see what they are like overall. If you are planning on applying for a loan in the near future, you must consider how your credit will affect your chances of getting approved. Those who have a low credit score can still potentially get a personal loan, but they usually end up paying a higher interest rate.

5. Putting False Details on the Application

The worst mistake you can make when applying for a personal loan is to not be completely truthful. It is crucial that you put only accurate personal information in your application, because otherwise you will most likely be denied. It can be tempting to do this, but in the end you will only hurt yourself.

6. Misusing the Loan Money

Some people are tempted to use the money they get from their loan for things they don’t really need, but it’s a mistake you will need to avoid altogether. Make sure that you only spend this money on what you first intended, because otherwise you will likely end up in a very bad situation.

7. Not Comparing Interest Rates

When you actually take the time to compare interest rates for the kind of loan you want, you should be able to get a good overall deal. Those who do not do this research will usually end up with a much higher interest rate, so you will want to find out what your options are like.

Final Thoughts

Getting a personal loan can help you out financially, but you don’t want to be reckless. It is important that you take some time to compare loans and assess your own finances as well as credit so that you are fully prepared. Too many people rush into getting a personal loan, and a lot of them end up struggling to pay off their debt for a long time. If you don’t want to get buried under debt for years to come, you will need to consider all of these tips before filling out a single application online.